By David A. Tweedy, CMC
When it comes to finding a RMIS (risk management information system) to manage risk pools, insurance risk pools prioritize systems that best handle claims, underwriting, loss control, and member management. These features are provided by many RMIS platforms today, although pools are not always a focus of these systems.
The chief fear within many risk pools is the loss of their members to direct insurance coverage. Having a strong RMIS to manage the pool is a good member-retention tool because it can upgrade the processes, data analytics, underwriting, and member management for your pool.
Traditionally, many risk pools believe they cannot afford a good RMIS, but costs have come down and these tools are attainable to any size pool, offering great solutions for many risk pool challenges — without having to piecemeal products and spreadsheets together.
Shopping for a RMIS? Here are five ways a RMIS can create efficiencies for your risk pool:
- Underwriting
Gathering exposure information is a monumental task during underwriting. Insureds need to rate on numbers and values of buildings, vehicles, drivers of those vehicles, and equipment among all members, and therefore there is tons of exposure information to collect.
Getting that data is very process driven. A RMIS can convert data to a digital form that automatically collects the information and prepares it for analysis. This includes:
- Pre-rating: Exposure information needs to be organized into proper “buckets” for analysis, and that is often a manual process. A RMIS, however, will perform the necessary collection and organization, and ping members when data is missing. The system may even have a conduit to a third-party software vendor to validate data on these values, made easy by a simple API integration. For example, a municipality owns vehicles that need to be referenced with regulatory bodies such as the Department of Motor Vehicles. The right RMIS can perform these checks for the pool before a policy is bound.
- Rating: Today, most pools rate and underwrite via spreadsheets, with manual workarounds and troubleshooting, creating loads of opportunity for human errors and omissions. A RMIS offers a streamlined way to assign rates for all the typical lines of business, from workers’ compensation to liability, property, auto and equipment lines, professional liability for public officials and law enforcement, school board liability and cyber liability.
- Endorsements: Antiquated systems or spreadsheet-based processes incorporate an unnecessary amount of complexity to assess risk when amending a policy. A sophisticated RMIS will use a portal to communicate with members during this process.
2. Member management
Use of a basic CRM tool is unavoidable for a risk pool because of the need to manage and effectively communicate with members. Larger pools may have the resources to use a dedicated CRM, but many pools would prefer to coordinate conversations and documents around claims management, underwriting, and CRM all in one place, through the RMIS.
Ditto on the risk pool’s board communication efforts.Since the board is a subset and representation of the pool’s membership, a RMIS can host a separate portal for board members to access items such as meeting notes, presentations from board meetings, budgetary documents, etc.
3. Reinsurance management
Everyone shares the cost of excess insurance in a risk pool even though pool members insure themselves, and the pool buys separate reinsurance limits to protect all members. As claims breach the excess limit, chargebacks or credits will need to be calculated and applied, and all must be administered by the pool. High-level RMIS systems are capable of handling this admin work that can uniquely benefit pools by reducing the manpower it takes to manage reinsurance.
4. Loss control
Typically, the pool provides loss control review and then a pool member oversees and executes the action items from the review, as members can earn credits on premium costs for satisfactory loss control efforts. Effective pools reveal how well their members are performing and earn credits for those who prevent claims and losses. Since loss history plays a big part and works into underwriting a RMIS can help tie it all together.
5. Data analytics reporting
Since a risk pool is typically filled with similar organizations, a member can derive comparison data on similar members from the RMIS to improve analytics efforts. This information can help support loss control initiatives, for example, if similar organizations are struggling with losses. Members can harness this value-add from a RMIS that they wouldn’t get otherwise.
As you can see, if your pool is still analyzing data via spreadsheets (or not at all) you are missing out on significant opportunities to improve operations and create a more worthy competitor in the insurance marketplace.
It’s easier to demonstrate how a pool can influence an organization’s board or decision makers when a member’s loss control, new claims management, and lower rates are easily obtained. A RMIS can help show how the pool helps lower rates and improve claims performance because they operate in the same business sphere.
What’s next for your RMIS?
There are other challenges risk pools face that a RMIS doesn’t solve — yet. For example, in the future, pools may seek accounting/financial operations through which they can cut checks and send premium billing notifications in conjunction with their RMIS. RMIS providers have been working toward integrating with financial software, as the need for this to integrate into the overall pool system suite is growing. Look for that up next on the horizon, but today, take advantage of the value a RMIS brings to your pool.
For more information on how the right RMIS can benefit your risk pool, schedule an Inquiry Call with David.