Collecting values sounds so simple: Send spreadsheets to those in the field to complete, copy and paste the responses together in a spreadsheet, and submit the results for renewal. What could be easier?
In the real world, of course, the process is anything but simple. Monitoring who has responded and who hasn’t, aggregating the spreadsheets, adding new properties, and deleting sold ones can be a grueling test of endurance. And unfortunately, there’s no gain for all that pain.
Blame the pain on the Risk Manager’s worst enemy: data friction.
Data friction – that is, anything that obstructs the flow of information – is what turns a seemingly straightforward process into a costly burden. Common causes include disparate technologies, static information, and siloed stakeholders. These obstacles waste time, inhibit communication, and grind productivity to a halt. Yet they are often so ingrained in everyday life, people either don’t realize the magnitude of the problem or they just accept the situation and carry on.
Take the values collection process. Beyond the frustration factor, if data friction throws your values off, you won’t be able to properly calculate your exposures, which could leave you tying up capital by paying for unnecessary coverage – or worse, underinsured and vulnerable to catastrophic loss.
Just how big your data friction problem is depends on the size and complexity of your risk ecosystem. How many brokers do you have? How many carriers do you have? Do you have a few locations in the U.S. – or hundreds around the world? Every time information is delayed, there is a cost. Data friction drains productivity, is the nemesis of efficiency, and can leave you reacting to something not anticipated because you didn’t have the right data at the right time.
Depending on how sophisticated and complex your risk ecosystem is, risk technology may just be the secret weapon your organization needs to fight data friction. Take that painful values collection process, for example. A Risk Management Information System (RMIS) automates virtually every step involved in collecting values for renewals. Data is entered one time on user-friendly screens to ensure consistency and accuracy. Missing or incomplete information triggers an email reminder to the person responsible. You get regular progress reports on what data has been submitted, and any unexpected values are flagged for further investigation. Values also are consolidated to show important changes and trends from year to year, and everything is formatted ready to go with market submissions. Now that once painful process is sounding much more bearable, right?
Identifying, addressing and minimizing friction is a complex and never-ending process. It requires identifying data friction sources, prioritizing focus areas, and ultimately minimizing the friction with each. To learn more about how risk technology can help fight data friction be on the lookout for future blogs in this series, including the 3 things holding your data back.