Across the modern business spectrum, airlines have to wrangle with some of the most complicated risk management challenges. For instance, risk managers have to insure large fleets of aircraft across multiple insurers. This involves allocating funds to pay for premiums across several individual carriers.
It’s also common for data that pertains to risk to be siloed, especially for global airlines operating in multiple countries. This also makes it hard to set up a risk oversight system, especially when you run an international operation.
The good news is with integrated risk management (IRM) software, you can optimize even very complicated insurance policies and fine-tune your loss ratios. You can also use your integrated risk management software to reduce how much you have to pay in premiums and lower your total cost of risk (TCoR). Here’s how airlines can use an IRM solution to streamline policy and policy renewal management and drive loss prevention.
Optimize and Manage Insurance Policies
Risk managers in the airline industry have to oversee and manage a vast portfolio of policies, each with its own coverage details and premiums. The number of factors that pertain to risk is unique for each aircraft and facility. So it can be hard to coalesce all of the pertinent data from multiple locations around the world.
But with IRM software, airlines can:
- Optimize what they spend on premiums. You can leverage the data connected to each covered asset to decide exactly how much coverage you actually need.
- Choose the most effective limits and conditions. There’s no need to waste money on excessively high coverage limits and expensive conditions when you have all of your asset data in front of you in a centralized IRM system.
- Automatically track aggregate erosion. No matter how many claims you have to file, you can see exactly how each one impacts your aggregate limit. In this way, you know how much headroom you have as the year progresses.
For instance, suppose that, as a risk manager for an airline, you want to make sure you allocate your premium funds in the most effective way possible. You decide to use your IRM to first isolate the likelihood of weather-related risk events in different areas of the world. Your IRM helps you collect and analyze this data.
You then pull up the insurance portfolio data for each of those areas and the related assets. To your surprise, you’re overspending in several regions. The historical weather data doesn’t justify the level of coverage you’re paying for. With this information in hand, you can then make the call to adjust your coverage for those areas, reducing how much your company has to pay in premiums.
Streamline Policy Renewal Management
The ability to use IRM software to streamline policy renewals is one of the most effective tools for reducing TCoR for airlines. Renewing your policies is an ideal time to increase your protection and save money at the same time, especially if you have a wide range of assets in multiple areas.
IRM software breaks down the data silos that often get in the way of making well-informed risk management decisions. All information is front and center, easy to see and visualize, and, most importantly, actionable.
Further, IRM software automates the process of collecting, consolidating, and analyzing exposure and risk data. This means you don’t have to invest countless hours crawling through reams of data, trying to drag out information that impacts your risk landscape.
By the same token, you also avoid having to simply maintain the status quo—renewing without taking a deep dive into your data.
How IRM Software Streamlines Renewals for Airlines
IRM software gives you a deep toolbox that includes:
- Customizable questionnaires that are easy to use
- Automated communication between users
- Customizable dashboards and reports that make it easy to monitor your risk management system
- Data analytics for simple, straightforward oversight of risk profiles and any applicable trends
As a result, you can easily reduce the time it takes to collect data by up to 70%. At the same time, you have enough information to reduce premiums by 10%—or more—because you have full visibility into your entire portfolio.
Drive Loss Prevention
With IRM software, airlines don't have to simply sit back and let incidents happen. Instead, you can drive loss prevention by analyzing the root causes of claims with a single, consolidated system.
For instance, suppose an airline has to file many claims for cargo damage, and these are driving up the premiums it has to pay. Using IRM software, the airline can identify trends regarding which airports these claims tend to originate from. The risk management team can then recommend the airline:
- Train the cargo staff at these airports.
- Examine the equipment used for cargo management to identify issues that could be causing incidents.
- Re-examine policies and procedures at each of the responsible airports. They may be able to improve workflows or better allocate human resources to reduce the number of incidents.
As an airline risk manager, you can take steps like these to lower your loss ratio and decrease the deductibles you have to pay to each insurance carrier. As a result, you can watch your total cost of risk drop year over year.
Lower Your TCoR with Ventiv
With Ventiv, you get all of the above capabilities and more—all in a single IRM solution. With interactive, customizable dashboards, you can keep your finger on the pulse of your entire, risk portfolio, regardless of how many assets and countries it spans. To learn more about how Ventiv’s solution can be a tailwind for your risk management system, connect with a rep today.
