|
Home |
Software Providers |
Consultants |
Articles |
Columns |
Reviews |
Headlines
|
|
|
- |
| - |
|
- |
Entire contents Copyright © 1999 Business Insurance "An overview of trends in RMIS"
by David Tweedy |
I JUST LOVE WITTY quotes and cartoons. When I thought about the best way to describe the current state of the RMIS market, what better way than to use several pithy (and hopefully descriptive) quotes that describe some of the current industry trends. Also, it will serve as a segue into discussing what to expect in the Risk & Insurance Management Society Inc. annual conference and exhibition in San Diego later this month. Just when we thought that the ultimate system configuration had arrived in client/server technology, things are changing again! Client/server technology (whether in two or multiple levels or tiers) distributes computing power and analysis to the clients from a local server. It was powerful enough to replace the mainframe, centralized model that insurers and large third-party administrators had been using for years. The move to client/server supplanted the trend to implement a true Windows format (though this, too, is still taking place). For the past few years, most significant vendors invested or planned to invest in developing these systems. This was the ultimate model and everyone seemed content. Now, within the past year or so, movement towards the development of a browser based (using secured intranets and extranets) system is gaining momentum. CIGNA Corp., Chubb Group of Insurance Cos. and American International Group Inc. are three good examples of insurers embracing this technology. DORN Technology Group Inc. is a good example of an independent RMIS vendor with such a product. Given the attraction of the Internet-not to be confused with intra or extranets-many clients and vendors are increasingly interested if they can be assured of data security. Many of the other vendors are looking into their own versions. Ironically, the browser-based systems are somewhat of a throwback to old mainframe/dumb terminal days. Software changes can be made on the main server and simultaneously transmitted to all clients over telephone or direct T1 lines. The ``clients'' box can be a simple network computer and doesn't need the power of the full PC, because all the software capability is coming from the client.
Other than the client/server vs. browser issue, there are no really significant technology issues since last year. In fact, many vendors are still working hard to accomplish transitioning their older mainframe or PC based software into a true Windows environment (not just a cosmetic front end). And then there's the Windows 3.1 to Windows 95 and NT transition which is still ongoing. Not only must the vendor consider his or her client-``Do they have computers that can run my software?''-but also, has the vendor even made the move to Windows 95 or NT? We've really gone beyond the stage where performance issues (quote above notwithstanding) have improved significantly.
So, what's new with the industry itself? As a mature marketplace, one would expect fewer new significant entrants (defined as providing full service RMIS capabilities, not just specialty software). There are no new major players as reported in December's BI on RMIS. What we do have is the continued trend of old players becoming more active (insurers) and some of the mainstays changing corporate direction. Here's a quick profile of the major players on how the lineup looks pre-RIMS:
Corporate Systems Inc., the oldest and largest RMIS vendor, seems to be concentrating on its core business expertise of data conversion and becoming the claims/risk systems back office to insurers and TPAs. It does not seem to be focusing on selling new risk management accounts. Pyramid Services is now owned by the Bass Brothers of Houston, having been sold by Aon Corp. in February. Pyramid is also working on developing a browser based system alternative and is a full service RMIS vendor. The other major independent, DORN Technology Group, maintains its comprehensive RMIS product line and is focusing on developing and promoting industry-wide data standards. Further, DORN has developed some World Wide Web applications for the Riskmaster product line. Other independents, such as ATS and DAVID (recently sold by Watson Wyatt Worldwide) remain consistent.
CARE Systems Corp. GenSource Corp. (formerly CIC). Nichols Engineering (formerly Conway). These three vendors continue to offer solid property/casualty claims administration software for large self-insureds and TPAs. No significant changes noted.
Crawford RSG. Envision/Near North Risk Technologies Inc. J&H Marsh & McLennan Inc.'s STARS. Sedgwick Information Systems. Crawford RSG continues to concentrate on developing its core mainframe/timeshare Windows-based system, Sigma for Windows. In addition, it is also offering its stand-alone, client/server based RMIS called ParaRisk despite the fact that it pulled or de-emphasized marketing the ParaRisk products on two occasions. The departure of Pyramid has removed Aon from the full-service RMIS ranks. Envision, with the full backing of technology-oriented Near North, is developing into one of the most comprehensive and easy-to-use RMIS available. J&H/M&M evidently has decided to both sell and consult on software-related services. STARS has developed into a comprehensive RMIS and, with recent reorganizations, is being well-supported by the parent firm. Sedgwick continues to develop its Windows-based INFORM risk management information system.
AIG. Chubb. CIGNA (ESIS Inc.) RISKTRAC Inc. (Liberty Mutual Group). These four insurers, especially CIGNA and Liberty Mutual, have made significant strides in their RMIS development. The first three have developed some type of Web-based products. ESIS' Risk Advantage is being deployed now to its client base. Combined with access to the CIGNA data warehouse, clients have good data from which to make benchmark assessments. Similar products exist with the rest of this group. RISKTRAC continues to make impressive strides in user-friendliness and executive-level data analysis. Further, they offer an unbundled system solution.
Yogi's comment is pretty accurate. Developing products and services in a mature subindustry within dynamic insurance and technology environments is a tough task. Many vendors are working on better 24-hour or 16-hour coverage capabilities and better methods of tracking losses through multiple layers of coverage. However, with risk management staffs shrinking (or shrunken) to a bare minimum, they must rely on outside help and computer tools to aid in decision-making. Such an example is a small niche product called Cost of Risk Analysis, or CORA. Developed by International Security Technology Inc., CORA is a modeling tool that assesses all types of fortuitous risk (including property) given risk parameters unique to each company. Then, it assists the risk manager (or consultant or broker) to run the model under different scenarios as conditions are changed for analysis. Tools like this one assist the risk manager in proper risk assessment and valuation. Another example is Quality Quest by Sundram Claim Consultants. This product is a systematized approach to evaluating 100% of a claims database and is designed to identify problem areas (reserving, payment patterns, litigation costs, etc.) without costly field claim audits which may only look at a small sample of claims. Both of these product/services are examples (there are others) of true value added system tool aiding in the risk management analysis process.
No, don't do that. It's a temptation, though, I know some that have. Yet, I think the following two should be rigorously addressed by the major players above all else: Provide REAL value added products: I suppose it is nice to see 15 different ways to graph the top 10 workers compensation injuries for last quarter. Yet harried risk managers sure could use easy-to-use and practical tools, such as well designed executive information systems, reliable data conversion, and unique tools such as CORA. Provide substantive service: Many do not realize how difficult it is to provide exemplary service. Companies such as The Walt Disney Co., Wal-Mart Stores Inc. and Nordstom Inc. are obsessed with delivering superior service. Unfortunately, too few RMIS vendors (or insurance industry companies) would be considered as truly service oriented. While it is true that the typically small staffed RMIS vendor must combine technological and risk management expertise to a wide variety of clients, there is great opportunity here. The vendor that truly handles its customers well (from initial contact and data flow design to software installation, training, debugging, and the dreaded data conversion) will sweep up the competition. To date, that has not happened in a consistent fashion. Standardize Data Formats: DORN Technology Group deserves credit for pushing for a standardization of data record layouts. Converting from one type to another among insurers, TPAs, and self-insureds is tedious, error-prone and costly process. Unfortunately, it will take a unified and concerted effort of major insurers to get behind the process and make it happen. RMIS vendors and their clients can encourage this process as well.
Who would have thought that saving those two digits back in the '60's would threaten (according to some doomsday sayers) global financial chaos! In a sense, the computer industry did it to itself. Regardless of how bad it actually turns out to be, the Millennium Bug will bite in less than two years. For buyers of RMIS, the exposure goes beyond ensuring that your RMIS vendor is Year 2000-compliant. What about the feeder systems? What about your company's own data systems? And how are you assessing the impact of Y2K exposures? Can your RMIS model these exposures?
Where is this industry going? Difficult to say, because much depends on where risk management is going in the near future. Will risk managers' roles expand outside traditional boundaries as some are doing now (such as Microsoft Corp. or Textron Inc.)? A credible case for expansion can be made easily. If so, good RMIS products and services will be a critical part. If you walk the endless rows of exhibits at the upcoming RIMS conference, you will see the major RMIS vendors and their improving product lines. Perhaps some new ones will be there. Slicker systems, better delivery mechanisms, more functionality. But the industry needs a long-range goal. Above all, they must be flexible. Remember what that wise philosopher of our age, Yogi Berra, said: "You got to be careful if you don't know where you're going, because you might not get there." Copyright Business Insurance 1998 |