A Risk Management Information System (RMIS) allows you to do more than just manage claims or keep a repository of your policies and properties. If used correctly, it can achieve real financial benefits. To accomplish this takes planning to ensure your RMIS has been implemented to match your industry and company needs, as well as your expertise to capture and make use of the results to manage your risks.

But just having a RMIS isn't the end of the story. It is the way the system is used that makes the difference. To illustrate that point, we have drawn upon our experience to highlight some questions that may help to improve the value you get from your RMIS.

Q: Can I use my RMIS to show my board how I am performing?

A: Most RMIS now allow you to monitor your company's total cost of risk by incorporating your loss costs, premiums and associated costs, plus any associated risk management expenses. This can be rated both in absolute terms and as a percentage against your company's total revenue to allow for peer comparison. From a board-level perspective, this is an ideal key performance indicator (KPI) for the risk manager's performance.

Q: How can I get the best property rates?

A: A RMIS allows you to capture the complete risk profile in each subsidiary of a property. This can cover their operational or underwriting values, such as total revenue and number of employees, and for each property, the COPE (construction, occupancy, protection, exposure) details along with the property values. With this information you can provide your property underwriter the quality data he or she needs to get the best property premium rates, showing the current risk profile of each subsidiary, zones of maximum loss and how the profile has changed from previous years.

Q: Can my RMIS identify why my total cost of claims is rising?

A: With the full repository of your loss data, you are well armed to identify where action is needed and where to optimize the spending of your loss control budget. A RMIS often will provide extensive reporting capabilities to support you in this process, including:

• Identifying the subsidiaries or locations causing most losses—either by using straight frequency and severity ranking reports or, more helpfully, using weighted reports to give true internal benchmarks (or burning costs) and identify the best and worst performers. For example, a retail chain should not only be interested in the number of incidents in each store, but how many incidents per square foot or traffic per hour in order to accurately rate each location.
• Identifying the root cause of the losses and then taking proactive steps to mitigate these underlying causes. For example, a logistics firm can identify whether losses were caused by particular packaging or a specific leg of the journey.
• Identify trends over time, so that patterns can be established and areas can be identified before they become problematic. Trend reports can spot unusual movements and patterns.

Q: How can I improve the efficiency of my loss notification and renewal process?

A: A RMIS is ideal for efficiently collecting data and avoiding the rekeying of data. Studies have shown that up to 20 percent of employee time can be saved through the optimal use of an RMIS with features such as:

• Electronic incident/loss notification forms, with a questionnaire style, can be developed so that noninsurance professionals can enter your incidents/losses where and when they occur. This avoids rekeying of data from paper forms and increases the speed and quality of notification.
• Similar approaches can be taken with the collection of renewal data, either by using questionnaire-style electronic forms or spreadsheets that are automatically created and then uploaded. This allows you to collect renewal data in a structured and consistent fashion and avoid the lengthy consolidation of spreadsheets.

Q: Can I have an efficient and transparent method of allocating costs to my operating units?