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Client requests spur vendors to develop, improve offerings; Risk managers have asked for benchmarking product

Risk Management Systems & Strategies
Spotlight Report December 2, 1996

Risk management information systems vendors are responding to some special requests for new features that could make risk managers' jobs a little easier.

RMIS vendors constantly are introducing new products (see related story), and often RMIS enhancements are driven by users' unique needs. Vendors realize there is opportunity in listening to what their customers want.

Often, the result is that RMIS vendors will enhance already existing products. Other times, risk managers' suggestions lead to products that-while new for a vendor-represent efforts to improve existing technology. But risk managers sometimes can spur the creation of new products.

For example, Alexander & Alexander Services Inc. has heard the call from risk managers worldwide who want a benchmarking product that will allow them to more accurately calculate the cost of risk and compare it with that of other companies.

Stephen Moritz, global director of ANISTICS, A&A's systems development unit, recently met with a group of risk managers in the United Kingdom. "They were talking about benchmarking, having the ability to look at their total cost of risk,'' he said.

"I keep hearing (benchmarking cost of risk) as the No. 1 priority,'' said Mia Shernoff, director of Access A&A, an Internet-based service formed for the broker's clients. "There's really no indicator of that data commonly available now.''

In response to demands from risk managers in the United States and abroad, a product expected to be available in 1997 will allow users "for the first time to be able to put together all the elements to do that in one database,'' said Paul Lavin, vp of operations planning at Alexander & Alexander Services.

The benchmarking product will, among other things, help risk managers size up a potential acquisition by calculating the target company's cost of risk and estimating its impact on that cost for the acquiring company.

Users will be able to access the database via the Internet through Access A&A, "a very low-cost solution,'' Ms. Shernoff explained. "There is no proprietary hardware or software.''

Corporate Systems Ltd. of Amarillo, Texas, used feedback from a survey conducted by the Quality Insurance Congress to spot risk managers' needs and develop what it calls "breakthrough technology.'' The Nashville, Tenn.-based QIC was formed in 1993 to identify and solve insurance industry service problems. Members include policyholders, insurers, intermediaries and others with an interest in the insurance industry.

The survey, completed earlier this year, indicated that risk managers at large and midsize companies "are looking for a knowledge base to help them solve their problems,'' said Jay Deragon, executive director of the QIC.

Corporate Systems responded by developing a Windows-based software product called Quality Tools. Using statistical tools and quality concepts, "it automates a seven-step problem-solving model for risk managers,'' explained Scott Gilmour, vp-sales/marketing.

"It allows the risk management department to analyze data and communicate to management that these are the problems based on the statistics,'' Mr. Gilmour said.

The system allows risk managers to define the scope of a project-like, for example, improvements in claims reporting-in the first step and move through the other six to identify and implement solutions.

Near North Risk Technologies Inc. in Chicago has developed a product designed as a response to risk managers' need for a computerized method for tracking certificates of insurance.

Near North, a unit of Near North National Group, created Certificate Management Services to help risk managers "tackle the arduous and paper- intensive process'' of tracking the certificates from vendors and suppliers, explained Eileen Oswald, chief operating officer of Near North Risk Technologies.

Much of the tracking of certificates has been done haphazardly by risk managers, who unknowingly may be putting their companies at risk, Ms. Oswald said. Failing to keep up with the certificates in an orderly manner could mean coverage thought to be in place may not be there when a claim arises.

Certificate Management Services scans certificates into a program that allows remote users to access information, explained Jan Milwood, administrative manager. The program compares the information on the certificates with insurance requirements for the project that a vendor or supplier is connected with. If the system determines the requirements are not being met, it generates a letter with that information and sends it to the certificate holder.

Report capabilities let risk managers know which vendors or suppliers do not have proper coverage in place and when certificates are expiring. The service allows risk managers "to make adjustments to protect themselves,'' Ms. Milwood said.

Ms. Milwood said the Near North system differs from others in that "we have enhanced reporting and notification capabilities in our system.''

Certificate Management Services began operating about eight months ago and now tracks certificates for six large clients. The necessary certificates can come from risk managers or their contractors.

A recently released product called GenVIEW from California Interactive Computing Inc. in Valencia, Calif., answers risk managers' requests for a program that can detect irregularities in workers comp, health care and non- occupational disability claims payments, according to Jerry C. Buckley, president of CIC.

Part of the program's function is to work "as a management tool to eliminate double-dipping'' by employees, Mr. Buckley explained.

The program also analyzes the propriety of, among other things:

The cost and quality of care by health care providers.

Diagnoses.

Treatment.

Gallagher Bassett Services Inc. listened to RISX-FACS claims-administration system clients who were requesting an easier way to file first-report claims infor-mation, according to Wally Gawaluch, executive vp of information services. Clients had been sending the information via computer tape, but they wanted to send it online.

"We worked with a number of clients and came up with a standard file format for exchanging the information,'' Mr. Gawaluch said. The data format means first- report information now can be sent electronically to Gallagher-Bassett's claims adjusting staff for processing.

DAVID Corp., a San Francisco-based vendor, said it changed the way data fields are set up in its Renaissance program because of numerous requests from clients.

The program was written to allow users to customize the fields risk management staffers have to fill in when entering data like claims information, explained Chris Carpenter, director of software development at DAVID. "Some are set up by the system, and some can be set by the user.''

Mr. Carpenter said DAVID also has built in "triggers'' to the system that call for "specific things to occur as you do things in the system".

For example, in closing a claim, as information is entered or processes are completed, the system triggers other steps that have to be completed, Mr. Carpenter explained.

Suggestions from risk managers' senior management also can lead to improvements in existing products.

For example, CIC is responding to requests from clients' top management to develop a product to help risk managers manage disability claims.

"Risk managers are responding to requests from senior management to manage the entire disability spectrum,'' including non-occupational disability claims, Mr. Buckley explained.

CIC's new GenDIS program "will give risk managers the ability to manage disability events in a fully integrated fashion,'' Mr. Buckley said. It will allow them to apply "skills used in occupational disability to the non- occupational side.''

The program, which will handle both long- and short-term disability claims, integrates with CIC's GenCOMP workers compensation management system.

RMIS systems also are benefiting from suggestions by sources other than risk managers or their senior management.

A request from the U.S. Army led to enhancements in products offered by Control Software Group Inc. of Columbus, Ohio.

Fort McPherson near Atlanta uses Control Software's Risk-Control Plus system, which allows the user to track accidents by 71 information fields, including lost time, type of injury, work-site rule violations, and insurance and legal costs, explained John P. Nipps, president of the RMIS vendor.

At the Army's request, Risk-Control Plus was expanded to allow the Army to track the status of other kinds of losses as well as various risk management efforts, like the status of employees' safety training. "It allows you to track any number of risk exposures,'' with the capability of establishing separate databases for each, Mr. Nipps said.

As a result of the Army's special request, the enhancement is now available to other Control Software clients.