Sharing information elevates the visibility of the risk management function, and increases understanding and cooperation. Having the ability to communicate risk management efforts and present results promptly and concisely is very powerful. Risk management information systems can provide the tool.
In today's world, technology has become such an integral part of our lives that even grandmothers use e-mail to talk with their grandchildren. Surely if grandmothers have figured out how the Internet can get their message across, risk management professionals should see the same value in this technology. The Internet (or your company's internal Intranet) can also be used to "get your message across" in a format that is informative, usable, interactive, and less intrusive than pounds of paper.
Typically, a currently available risk management information system (RMIS) is "Internet ready." These systems include the capability to "publish" risk management information on secure web sites, distribute information by e-mail, or even allow direct access to the application using a desktop browser.
How Can a Risk Management Web Site Work for You?
Consider the impact of a corporate web site (or a web page on an existing corporate site) dedicated solely to risk management issues. Secure sites could contain information on losses or severity and frequency trends, by type or cause of loss. Benchmark information (typically normalized to minimize "competition" between the users) could be provided to corporate subsidiaries or divisions, with the goal of providing tools to measure performance. Web sites could also include risk management "tips of the month," disaster plans, training information, corporate telephone books, and emergency numbers.
More advanced web sites might include the corporate cost allocation formula with interactive models, and the ability to generate standard or ad hoc reports. Monthly loss information could be downloaded into these models or printed in reports to raise awareness about the impact of losses. Providing users the tools to generate their own analytical reports would support proactive loss management and loss prevention efforts (as well as allowing management to see the impact of losses on possible remuneration).
The majority of existing web sites are designed to facilitate prompt incident or loss reporting. Electronic incident and loss report forms are provided on the web site. Supervisors can simply open the web site, complete the form, and submit it via e-mail directly to insurers or third-party administrators, or directly into a database maintained in the risk management department where the report is reviewed further before disposition. If the RMIS is attached to the web site, incident reports could be entered directly into the application, providing real-time access to new loss reports and incident information.
Security on these web sites could be maintained. Web sites on internal Intranets would be the most secure and could be protected by an existing Intranet firewall and, if necessary, by additional password protection. Internet-based web sites would be less secure, although by using technology (such as digital certificates, passwords, and other tools), privacy could be protected.
How Does a New RMIS Support the Web Site?
The most current versions of risk management information systems in the marketplace have the capacity to support risk management web sites. Minimally, they can facilitate communication (and eliminate paper) by publishing monthly reports through e-mail or by using integrated web browsers, which support the use of an Intranet or Internet-based web site. A web-based RMIS can provide information and loss management tools throughout the entire organization.
A fully integrated RMIS/web site could provide direct access into the RMIS from the web site. The ability to view, record, or alter information in the RMIS could be controlled by security and passwords within the RMIS. Employees could request standardized or ad hoc reports independently from the risk management staff, supporting the concept of responsibility for performance.
A fully functional web-based RMIS could support the risk management function in highly decentralized organizational structures, where typically the responsibility for profitability or financial results rests with the management of the subsidiary or division. Managing risk in this type of organizational structure can be difficult because the risk manager is usually too far removed from day-to-day operations at the subsidiary or division to know when loss trends begin to develop. The risk manager may be the last to know when the frequency of a certain type of loss begins to increase, particularly when location management's interest may be served by delaying loss reports or independently "managing" the loss by self-funding costs.
A web-based RMIS facilitates prompt reporting; there is no obstacle to providing an immediate report of a loss because of an absence or missed telephone call. Anyone with a desktop browser can complete a loss report. The web site can also track when losses are reported, providing a platform to reward prompt reporting and penalize delays.
However, along with easy access to the RMIS to report new incidents and losses comes easy access to claim details at the field level. Some risk managers may not want to share information on specific claim reserves or settlement strategies, due to concern over having to continually explain the position taken by the risk management department or insurer. The frequency of confrontation is typically directly proportional to the amount of impact loss frequency and costs have on individual managers' bonuses. There is also the issue of protecting the privacy of injured employees' medical information, and containing distribution of information on claims of organizational or institutional importance.
The level of access directly into the RMIS needs to be designed with consideration of these issues, and can be controlled through security access defined by the RMIS access. However, if responsibility for controlling losses is placed on the subsidiary or divisional level, then access to information needed to affect the outcomes must be provided. The web site could provide the platform to educate and provide the tools needed to gain consensus on managing losses.
Those of us who have been part of the risk management community for a long time know that sharing information elevates the visibility of the risk management function, and increases understanding and cooperation. Having the ability to communicate risk management efforts and present results promptly and concisely is very powerful.
The most current versions of risk management information systems in the marketplace have the capacity to support risk management web sites. Minimally, they can facilitate communication (and eliminate paper) by publishing monthly reports through e-mail or by using integrated web browsers, which support the use of an Intranet or Internet-based web site. A web-based RMIS can provide information and loss management tools throughout the entire organization.
A fully integrated RMIS/web site could provide direct access into the RMIS from the web site. The ability to view, record, or alter information in the RMIS could be controlled by security and passwords within the RMIS. Employees could request standardized or ad hoc reports independently from the risk management staff, supporting the concept of responsibility for performance.
A fully functional web-based RMIS could support the risk management function in highly decentralized organizational structures, where typically the responsibility for profitability or financial results rests with the management of the subsidiary or division. Managing risk in this type of organizational structure can be difficult because the risk manager is usually too far removed from day-to-day operations at the subsidiary or division to know when loss trends begin to develop. The risk manager may be the last to know when the frequency of a certain type of loss begins to increase, particularly when location management's interest may be served by delaying loss reports or independently "managing" the loss by self-funding costs.
A web-based RMIS facilitates prompt reporting; there is no obstacle to providing an immediate report of a loss because of an absence or missed telephone call. Anyone with a desktop browser can complete a loss report. The web site can also track when losses are reported, providing a platform to reward prompt reporting and penalize delays.
However, along with easy access to the RMIS to report new incidents and losses comes easy access to claim details at the field level. Some risk managers may not want to share information on specific claim reserves or settlement strategies, due to concern over having to continually explain the position taken by the risk management department or insurer. The frequency of confrontation is typically directly proportional to the amount of impact loss frequency and costs have on individual managers' bonuses. There is also the issue of protecting the privacy of injured employees' medical information, and containing distribution of information on claims of organizational or institutional importance.
The level of access directly into the RMIS needs to be designed with consideration of these issues, and can be controlled through security access defined by the RMIS access. However, if responsibility for controlling losses is placed on the subsidiary or divisional level, then access to information needed to affect the outcomes must be provided. The web site could provide the platform to educate and provide the tools needed to gain consensus on managing losses.
Those of us who have been part of the risk management community for a long time know that sharing information elevates the visibility of the risk management function, and increases understanding and cooperation. Having the ability to communicate risk management efforts and present results promptly and concisely is very powerful.
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