New RiskTech solutions are helping businesses respond to escalating risk across industries
By Patrick O’Neill, Founder and President, Redhand Advisors
Risk is ubiquitous in 2022. In fact, as many as 57% of boards of directors have increased or expect to increase their risk appetite in 2022, according to Gartner. To combat such volatility, businesses are more often seeking out specialized solutions that bring more data on their institutional risk to the forefront
Historically, the insurance industry has been underserved by technology solutions. Not too long-ago Risk Management Information Systems (RMIS) were the only tech solutions available to manage risk. RMIS capabilities have continued expand to meet demand but typically these new capabilities aren’t as comprehensive until there is greater adoption. RMIS providers must focus on their core capabilities to support their existing customer base.
RiskTech solutions, generally, are more specialized and focus on specific solutions. These specialized solutions are solving problems that didn’t exist just a few years ago, or where technology wasn’t able to solve for it in the past. The ability to find a technology solution for your latest or most pressing risk is what’s driving RiskTech innovation.
More than 85% of RMIS Report respondents said they are currently seeking best-in-breed solutions to integrate with their RMIS. It’s worth noting that not every RiskTech solution can or needs to be integrated with your RMIS.
Here are four trends we’re currently watching in the RiskTech space:
- RiskTech is growing faster than traditional Insurtech. Industry investment and innovation is accelerating rapidly, specifically in niche areas, such as RiskTech. RiskTech is engaged in solving organizational problems that haven’t been solved before. Take claims adjudication, for example. There are RiskTech solutions you can integrate with your RMIS to add analytics and artificial intelligence (AI) capabilities to improve your claim outcomes.
- RiskTech is transforming traditional legacy-driven and manual processes. We knew industry data collection was antiquated, but COVID taught us just how analog we really were. RiskTech can drive efficiencies by focusing on an organization’s digitization, providing more valuable data for decision making. LineSlip is a case in point. Their SaaS converts and digitizes policy program documents into data-rich dashboards, providing actionable insurance data regarding a business’ programs.
- RiskTech provides a continuous stream of innovative products. Beyond just scanned documents stored on your company network, RiskTech solutions are taking data from paper documents and transposing them into usable fields. Think: cost for coverages, auto liability metrics with AI, analytics, cyber and catastrophic risk tools, certification management and more. These products provide innovative solutions to complex problems.
- RiskTech + RMIS providers = the ultimate solution. We’ll see the innovation, then consolidation cycle continue in the RiskTech and InsurTech space. Integration does play this movement down a bit, so you don’t have to have 20 independent solutions. Integration is simpler than it was even a few years ago and you can integrate as much or as little RiskTech as you want into your RMIS. It’s advantageous for RMIS vendors to integrate with RiskTech as well to ensure the RMIS maintains its status as your business’ hub for all things risk. When partnering with bigger RMIS providers, RiskTech vendors have an opportunity to get in front of more end-users. RMIS providers will integrate so they can say to their customers: we have deeper capabilities that might fit your need if our basic service isn’t enough for you.
It’s onward and upwards for RiskTech
The RiskTech section of the RMIS Report debuted just last year. This year, it’s a significant piece of the RMIS Report story. We look forward to watching what is to come for RiskTech solutions both in 2022 and beyond.
- Gartner. “6 key takeaways from the Gartner Board of Directors survey.” October 21, 2022