RMIS-Web Risk & Insurance RMIS Article

"Column: Expanding Technology Tools"

by David P. Duden

August 1998

As newer technologies become more readily available to more users, it is wise to evaluate each new and exciting technology tool with a practical view from the risk managers' desktop. Several factors beyond the functional characteristics of the tool must be evaluated. Among these considerations is the integration into the technology standards of the organization (there are some out there), the support provided internally (and externally) for the tool, and of course the price of the technology.

As with most new technology, initially only large organizations can consider it due to budget constraints. As technology vendors expand the flexibility of the toolkit and begin to look for new markets for their products, middle markets and individual departments can begin to consider these solutions.

Systems once only considered enterprisewide solutions can be introduced to one department and interfaced with the organization if there is a solid cost justification in place that uses real numbers. This should include the cost of operating in the current environment vs. the estimated cost of the new platform.

Risk managers have to select the technologies that provide the best value for their organizations. And as long as the value of new information systems continues to rise, the cost can be justified. Increased functionality will include a greater integration with other enterprisewide systems.

One of the major developments for the risk manager to consider is the scalability of the application. First used as a buzzword, scalability can be the key to open up the door to new technology. The ability to customize the view of data is another development in risk management information systems and allows for improved efficiency and can reduce the learning curve of a new system.

Two new technology applications were introduced at this year's Risk and Insurance Management Society conference in San Diego, including imaging and voice and recognition; more technologies will be displayed in Dallas at the RIMS meeting next year.

Imaging: Imaging has been a technology that was not represented until this year at RIMS. More imaging vendors and systems integrators are now looking at the risk management market as an exciting marketplace ready for this technology. The improvements in workflow and the creation of a measurable workflow are leading benefits. But failure to implement a proper workflow remains a challenge for most organizations. Imaging vendors with experience in insurance will have a distinct advantage as they bring their products to this industry.

Once considered only an enterprise-wide application, imaging can now fit into a department and a department's budget. As with most risk management information systems, costs surrounding implementation can increase well beyond the purchase price. In fact, the cost of implementation of new information system often is three to four times the cost of the product itself.

Voice recognition: Voice recognition for the risk manager is another technology tool making its mark in the industry. Vocabulary has always been an issue with work even before voice recognition software was considered. For example, a third-party administrator could code a claim with an incorrect CPT code, resulting in misleading loss triangles that reflected excess medical reserves.

Most noninsurance-related professionals would need a dictionary to get through the jargon and abbreviations used in the industry. Voice recognition software enables risk managers to train the system with their voice. Many systems now include extensive vocabularies, including insurance jargon.

Three recent trade shows I attended all indicated that vendors have to address the different levels of automation needs for the attendees. A common thread among vendors was the desire to meet user needs from a practical standpoint. Companies that traditionally sold only the hardware components are now showing solutions. This is often accomplished through industry business partners. These partnerships along with the improvements in technology will only continue to improve the productivity for the risk manager.

David P. Duden is the National RMIS Practice Leader for the RMISLab, an independent RMIS testing division of Deloitte & Touche LLP. in Hartford, Conn.