By David Tweedy, Senior Advisor, Redhand Advisors
There are over 90,000 local governments in the United States, and an estimated 80% of them participate in one or more of the 450 risk pools that currently serve these municipalities, school districts, and public entities.
Pools share common values and tend to be lumped together under a single umbrella, but each is comprised of its own set of unique variables and challenges. Some exclusively serve specific entities (like school districts); others only offer certain types of insurance; some partner with commercial insurers, while others are sponsored by associations. This high degree of variation, coupled with the relatively uncommon claims that they handle, require pools to invest in customized claims, risk management, member management, and underwriting programs to effectively support their members.
There are many benefits to utilizing purpose-built risk technology to overcome the unique challenges pools face to reduce risk. Let’s dive into three case studies of them in action:
1. State-wide pool for local municipalities
This large pool provides property and casualty and workers’ compensation insurance for municipalities and school districts across the state.
Problem: Many years ago, the pool installed a leading information system. Without an IT expert on staff, the system was difficult to manage and created problems with issuing premiums, reports and renewal information to its members. After a major upgrade, the system was still not performing adequately, and generating even basic reports for members was an arduous task. The pool relied on spreadsheets and manual entry to track processes and correct errors. Matters were complicated further by staffing issues that left serious gaps in training and understanding of the software.
Challenge: Redhand Advisors was brought in to make recommendations on how to improve the organization’s use of its existing systems and identify potential alternatives.
Solution: A comprehensive needs assessment was done to determine whether the pool’s existing system could be improved upon or if the pool needed to cut its losses and switch to a new vendor. It was ultimately determined that a new system was required, and several appropriate vendors were brought in for the pool’s consideration.
Result: The pool selected a new vendor with Redhand’s support. We are currently working with the pool and the new vendor to implement the new system. We project the following benefits:
- Unified pool system on one platform, including claims, policy, rating, advanced reporting, loss control, and member portal
- Streamlined business processes on the policy side including renewals, data gathering, rating, policy, and endorsement issuance
- Improved claims administration software including advanced reporting
- Significant reduction in manual operations, resulting in improved efficiency
2. Large school district pool
This pool provides property and liability insurance, workers’ compensation, health benefits, and school construction insurance to school districts and community colleges.
Problem: The pool was not satisfied with its recently implemented risk management information system (RMIS). Issues arose during the implementation phase when the pool tried to configure the new system to work in the same way as its old system instead of transforming its processes to embrace the new software. The system wasn’t set up properly for its needs and features weren’t being fully utilized — a misunderstanding with the software’s claims program, for example, resulted in having to manually enter all deductible payments.
Challenge: After investing three taxing years into its system, the pool was almost ready to give up and move on to another RMIS altogether. They engaged Redhand Advisors to assess the system’s functionality, find the shortcomings, and identify the improvements needed.
Solution: After performing a deep-dive analysis of the system, the team collaborated with the system provider to overhaul several major processes and worked internally to retrain staff on proper usage.
Result: By holistically integrating the solution into the organization, the pool began reaping the benefits of the user-friendly, smart, unified system they’d been waiting for.
- The pool was able to stay with the existing vendor and did not have to go to a costly and time involved procurement
- Implemented additional functionality for financial reporting and deductible/reinsurance tracking
- Improved claim and payment flow, eliminating manual processes and handoffs
- Set up standard alert and notifications to eliminate tasks that were performed manually
- Client portal was developed and standard reports were made available directly from the portal to members
3. Mid-sized school district pool
This smaller pool provides property and liability insurance to public schools and other education related entities.
Problem: The pool was using a decades-old legacy system and completely outgrew its capabilities. The organization was manually managing numerous processes and needed a new solution with reliable functionality that could securely provide reporting, data analytics, underwriting, claims, and a client portal.
Challenge: Redhand Advisors was engaged to match the pool with the right RMIS fit for its size, function, and budget.
Solution: A thorough analysis was performed and several viable RMIS candidates of varying capabilities and costs were evaluated. The pool opted for a RMIS that would perform well for its specific needs and budget.
Result: The pool is implementing the right RMIS without overspending or overcomplicating the technology beyond the necessary scope for its organization. We anticipate the following benefits post implementation:
- Streamlined process for both claims and underwriting on a modern, up-to-date platform
- Improved reporting analysis
- Two-way portal communication with membership
- Elimination of many manual steps and reliance upon Excel spreadsheets
Tailor your risk technology solution
When it comes to risk technology implementation, there is not a one-size-fits-all product to meet every organization’s needs, nor do organizations have to entirely swap out their systems to be successful.
Pools need purpose-built software to effectively meet their unique needs. Redhand Advisors was able to steer these pools toward the right decision for their specific situation.
To learn more about how the right RMIS can best operate for your organization, schedule an inquiry call with David at Redhand Advisors today.