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What is a Risk Management Information System (RMIS)?

Angus Rhodes

A Risk Management Information System (RMIS) is an integrated computer information system used to aggregate risk data and to help decision makers evaluate business risks.

This information includes risk exposure, protection measures and risk management. Examples of stored information include loss-control measures, property values, records of prior claims and relevant insurance policies.

Like other computerized information systems, a RMIS system is easy to access from different locations and on different devices. It is flexible and agile, able to allow for the changing needs of a modern workplace. At the same time, it is tailored to support your business’ risk concerns, exposures, protection measures and risk management.

What are the features of a RMIS?

Many organizations view a RMIS as a claims management and incident reporting tool. This is certainly one component of the system, but it’s just the tip of the iceberg. Each RMIS offers a wide variety of features, some tailor-made for specific industries, from construction to healthcare.

To begin with, a RMIS offers a selection of modules, or components, used to collect data. A larger, more comprehensive RMIS will include modules to support all of a business’ current and future needs. Some of these modules include policy management, premium calculation, risk financing, contracts and vendor management.

A RMIS should also include flexible reporting tools to provide the information in a useful format. These tools are often available in a template format, but others are customizable to meet the needs of an individual organization.

Finally, a RMIS should help with automating processes. Gone are the days of manually inputting data. Today’s RMIS reduces administrative burdens and improves data accuracy by automating processes to eliminate human error and streamline data collection.

 

Why do organizations invest in a RMIS?

Prior to engaging a RMIS, businesses will often maintain multiple spreadsheets and databases, emailed communications and different siloed systems collecting data. A chief goal of a RMIS is to consolidate information and store it in one place.

A truly integrated system can provide a great benefit to risk managers who need to make critical decisions. In fact, part of the function of a RMIS might even be to keep track of where physical or online documents are stored.

Some of the most important reasons to consider investing in a RMIS include:

  1. Expanding responsibilities. Risk managers no longer play a supporting role on the finance team. Today, they are valued C-level executives, responsible for presenting to boards and other stakeholders on a regular basis. Their ability to access and manage the data is directly tied to their success in speeding up processes and assisting in decision making.
  2. Stricter governance regulations and more insecurity. Today’s world is litigious and uncertain. The cost of mistakes grows higher in an unsteady economy with a growing population and number of natural disasters. There’s more at risk.
  3. Brand reputation. With a global economy and easy access to social media, every organization’s reputation is on the line every minute of the day. An organization’s ability to manage its reputation – and potential damage to that reputation – is also a marker of its success.
  4. More data than ever before. Information is all around, and therefore, aggregating risk data has become more important than ever. It is nearly impossible to manage all the information efficiently via disjointed spreadsheets anymore. Through the use of technology, however, the information becomes not only manageable but useful.

 

Which businesses can benefit from a RMIS?

Risk management involves identifying, evaluating and prioritizing risks. Those risks can come from anywhere and expand at any time. The industries that can most obviously benefit from a RMIS are those with safety or insurance risks, such as construction, manufacturing, healthcare, hospitality, transportation, power and utility and food and beverage.

Other business with major concerns around liability will benefit as well. Businesses that are most in need of a RMIS currently experience challenges around:

  • Administration: Outdated systems, too much data to collect or third-party administrators
  • Risk financing: Complicated insurance coverages with multiple carriers
  • Visibility: A large number of risks to track, from properties to vehicle fleets and other assets
  • International: International insurance policies, multi-language or multi-currency requirements are complex

Why is a RMIS beneficial for organizations?

RMIS software offers a wide variety of important benefits, many of which businesses don’t realize. A RMIS:

Organizes data. With an increased volume of data, a RMIS collects information from multiple sources, highlights errors, filters out irrelevant data and provides context for users. During the creation stage, developers can actually specify field constraints and validate data entry against possible options.

Automates processes. A RMIS transforms data in order to compare like metrics. It populates reports and dashboards to gather information from many sources. A RMIS makes information available to all stakeholders and notifies relevant parties when a threshold has been reached.

Collects and organizes information. Not only does a RMIS gather data from across an organization into a single system, it can present that data in useful ways. The result enables:

  • Better strategic decision-making and allocation of financial and human capital
  • Active promotion of safety and loss control and a consistent risk culture
  • Optimized risk transfer costs
  • Better management of retained risks
  • Measured progress toward risk management goals.

It saves money. Through improved data collection and risk management procedures, organizations can expect to avoid insurance gaps and overages. In addition, working within a single system makes processes more efficient and eliminates the time needed to gather data. And that saves organizations time and money.

 

Active use of risk management information software can have a demonstrable impact on an organization. It can provide insights in decision making, reduce administrative burden, improve data accuracy and prevent losses.

 

Next Steps

For more information on RMIS technology and employing it at your business, contact Angus Rhodes, VP of Product Management.

 

The Definitive Guide to a RMIS

 

Jan 22, 2021

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