By Patrick O’Neill, Founder and President, Redhand Advisors
The time to implement RiskTech — from a small, specialized software program to a full-scale RMIS — is not now. It was yesterday.
In our technologically advanced world where digital efficiencies are less costly and in greater abundance than ever before, why do some companies still have antiquated risk management processes and systems? The answer can be found in numerous myths.
Here are four of the most common myths we tell ourselves to avoid change:
- “RMIS solutions have too many pieces that I don’t need or won’t use.”
Historically, a RMIS was the only game in town, so you either purchased the whole system and hoped you could utilize it all or didn’t pull the trigger because it was too great a commitment for the one or two issues you wanted to address. Today, it’s a different story, as niche players have created high-quality, sharply focused solutions, providing a plethora of a la carte RiskTech options.
For example, if you’re looking to improve policy and renewal management, you can implement a specialized RiskTech solution that specializes in supporting just that process. Today’s solutions integrate much easier, allowing you to utilize multiple solutions to solve unique issues.
The top three functions risk managers utilize a RMIS for, according to our 2022 RMIS Report, are claims management, incident entry and renewal data collection. In addition, 84% of those surveyed favored best-in-breed solutions that can be integrated into the broader platform. If you need more procedures covered, look beyond the highly specialized niche solutions and investigate systems that can house those functions under the same umbrella. But you may still not need to implement a comprehensive RMIS if a few specialized programs can do the job.
2. “The costs of adopting RiskTech solutions are out of reach for our business.”
Thanks to data storage and cloud computing, you can find RiskTech solutions at nearly any price point on the spectrum today. Not only have these systems come down in cost, but they manage claims more effectively and efficiently, reduce and track insurance costs, and eliminate opportunities for human error that are abundant in spreadsheets. Together, these benefits all result in better data and improved outcomes which simultaneously allows cost savings to build.
While the initial capital costs are a chunk of expenditure at once, legacy processes with minimal efficiencies and an increased margin of error are most costly over time. The ROI of implementing a new solution is often recaptured within 18 months.
3. “We’ve processed things this way for a long time, and it still works.”
Change management is hard, there’s no doubt. But so is maintaining the status quo when there are better ways to do something. Determine first which RiskTech solutions can indeed help your business do more with less. Don’t settle for the old-fashioned, legacy processes you’ve used, even if it creates some discomfort during the process.
You’ll need to demonstrate and explain why implementing RiskTech will help them perform better and lead to better results for the company as well. That’s change management 101, and it should not stand in the way of implementing a new solution.
4. “Implementing a system will be too much work and take too much time.”
Today’s modern solutions are much more configurable and simpler to implement. In the past, systems needed to be customized, which took time and effort during technology onboarding. Today’s RiskTech solutions are more easily configurable without the need for customizations to meet your specific requirements. Most modern solutions allow for a variety of configurations to accommodate business’ processes and workflows.
A new system can be set up to follow your processes, and not force you to adopt a cookie-cutter, off-the-shelf option. Organizations can take advantage of the solutions modern process automation provides.
Stop waiting, start implementing
If you still use outdated, legacy processes and the basis for your risk management, claims and insurance management is spreadsheets, know that you aren’t alone. But soon you will be.
Rarely do companies that implement a RiskTech solution regret making the change, because the technology provides better data, better analysis and lowers costs, making their jobs easier and companies more successful.
To learn how to start your RiskTech journey and discover the options available, schedule an inquiry call with Redhand Advisors.