By Patrick O’Neill, Founder and President, Redhand Advisors
In the last two years, most organizations have accelerated their reliance on data. Unfortunately, when it comes to risk management, too many are still reliant on manual processes to collect and store that data, and therefore, fall short when it comes to using it meaningfully by pairing data analytics with decision making.
Today risk managers need everything aggregated into a single digital platform, that ties together processes, reporting, and analytics. No one wants to rely on third parties such as TPAs, carriers or brokers to gather claims information or learn about renewals.
A more comprehensive digital strategy is needed.
In 2022, numerous risk managers and organizations will engage in a digital transformation to replace legacy systems and improve internal processes and analytics. The challenge will be choosing the ideal risk management technology solution(s) to drive risk-related decisions.
While there are a lot of moving parts to consider, the good news is, it’s entirely possible — with the right systems in place.
Here are the top 5 trends in risk management technology for 2022:
1. Expansion of risk technology platforms across your enterprise. With cloud-based platforms, it’s now easier and cheaper than ever to add hundreds (or even thousands) of users. As a result, new parts of the organization can gain access to the risk technology platform for use across departments and whole organizations. Operations managers, HR professionals, and even safety managers at job sites are utilizing RiskTech platforms today. With this newfound expansion, more can access reports, data can be collected electronically, and more organization-wide processes can be automated. We expect to see more organizations expanding their risk technology platforms across their entire enterprise in 2022.
2. Automated claims adjudication simplifies risk management. With the Great Resignation and ongoing labor shortages hitting businesses hard, there are fewer experienced claims adjudicators – and fewer workers, period – available to administer claims. RiskTech systems are capable to support automating many of the claim functions.
The faster a claim is resolved, the cheaper it is for the insurer, and better the outcome for the insured. From claims notification and assignment to automated reserving and auto adjudication, RiskTech automation can take many forms.
For example, a minor auto accident claim may be completely automated, while a serious worker’s comp claim automatically notifies to the appropriate personnel to the claim immediately, these systems can be configured to auto adjudicate simple claims without an adjustor touching the file.
Today, it’s not just the most sophisticated systems that support auto adjudication. In fact, automated risk management technology is more readily available now than ever before. Technologies such as robotic process automation, intelligent document processing, artificial intelligence, and predictive analytics are changing how claims are handled. Consult our RMIS report for RMIS feature information.
3. Cyber security leads to replacement of legacy technology. The risk of cyberattacks is a reality for all businesses. In fact, as many as 64% of businesses worldwide[1] faced some kind of cyberattack in the last year.
Your organization’s legacy system may not have the security compliance required in today’s environment. In previous years, these systems may have been grandfathered in, but now your IT and security departments are pushing hard to modernize and update. As a result, these departments are taking a closer look at the systems you rely on daily and making sure they’re built properly to protect the organization’s security and the client’s privacy.
In 2022, we expect more risk aware businesses to replace their legacy risk management system. Though launching a new risk management solution isn’t easy, the return on investment can be well worth it.
4. Increase in RiskTech solutions. According to the RMIS Report, 84% of respondents favor best-in-breed solutions that can be integrated into the broader platform. In fact, investment in these one-off solutions is a major happening in RiskTech today. Spurred by technology and investment, this class of solutions, which focus on helping organizations manage and mitigate risk, continues to grow.
It wasn’t too long ago that niche solutions weren’t practical. Now, more and more niche Software-as-a-Service (SaaS) solutions are available and they’re going deep with particular capabilities and functionalities that can integrate seamlessly with your core risk management solution.
5. The rise of the citizen developer. If your organization has a legacy claims system, it may feel as if you are frozen in time. Legacy systems are difficult to replace so some organizations are opting to overlay these systems with low-code / no-code solutions.
Driven by citizen developers with no background in coding, the low-code / no-code approach doesn’t require you to be a tech expert to use or a developer. You use drag-and-drop technology to build solutions for your own organization. In fact, Gartner[2] expects even SaaS companies to build their platforms in a low-code / no-code environment in the coming years.
We expect to see growth of solutions driven by citizen developers for specific business cases, especially because the costs are much more manageable than replacing legacy systems. For example, if you need to collect exposure data, you can create your own back-end solution through low-code / no-code software to collect the data and then populate your legacy software with the data you’ve collected.
The most successful organizations are the ones taking control of their technology journey. Consider your organization’s needs carefully and embrace digital transformation in 2022 as a means of to take your organization’s risk management to the next level.
For more information on finding the right risk management solution for your organization, schedule an Inquiry Call with Patrick.
[1] Techjury, “How Many Cyber Attacks Happen Per Day in 2021?” December 7, 2021.
[2]Gartner, “Gartner Forecasts Worldwide Low-Code Development Technologies Market to Grow 23% in 2021,” February 16, 2021.