At Risk Control Technologies (RCT), we are fortunate to work with a broad range of carriers who vary greatly in the lines of business they write, as well as in the size of their loss control teams. Over the years we have noticed a stigma with small loss control teams where they believe that due to their small team size, they do not require an automated system and they will not realize many of the significant benefits associated with implementing a loss control system. In reality this is rarely the case. As Terry Tucker of Shelter Insurance recently stated in an RCT testimonial video, “I think it (the RCT system) works on any level. We are not the biggest company ourselves, but it has worked really well for us for almost 12 years”.
This blog aims to address the wide variety of benefits that small organizations or loss control teams can expect to realize from the implementation of an automated loss control system.
One of the primary benefits commonly associated with loss control systems comes in the form of efficiency gains. However, small teams often mistakenly disregard these efficiencies, believing they are more prominent for large teams. In actual fact, with a small team it is arguably more important that each consultant is operating at maximum efficiency, as each individual has a larger relative impact on the work that can be handled by the department as a whole. Some common areas where efficiency gains are found include:
- Managing customers and assignments
- Planning and scheduling site visits
- Managing vendor relationships
- Report and letter generation
- Recommendation management and follow-up
- Integrating loss control with underwriting and claims
These efficiencies can translate into big savings for small to mid-sized teams. Some specific examples from RCT’s clients:
- Kentucky Employers’ Mutual Insurance saved each consultant 400 hours per year
- Farm Mutual Re reduced their average time from site visit to report completion by 27%
- Society Insurance’s productivity benefits over their first 3 years using the RCT system translated to estimated cost savings of $650,000
A full list of RCT case studies is available here.
Active management of the customer experience has garnered increased focus from the insurance industry in recent years. Outside of claims, which can often be an experience with negative connotations for the insured simply because a loss has occurred, loss control frequently provides the only touchpoint the insured has with the carrier. As such, the risk control department plays a vital role in the management of customer experience. In the case of small to mid-sized carriers, providing a positive customer experience (which ultimately leads to higher retention rates) is crucial. With a smaller book of business each policyholder comprises a larger percentage of the book, increasing the impact of any policy cancellation.
Loss control systems can assist to positively influence the customer experience in a variety of ways, including:
- Providing an online portal allowing for new ways to engage/increase touchpoints with an insured
- Allowing the facilitation of self-assessment surveys with clients (ex. low premium accounts can fill out an online survey so you can determine their risk profile)
- Facilitating the publishing of safety resources (and tracking the insured's engagement with them)
- Enabling the collection of standardized data that can indicate an insured’s engagement levels and highlight accounts with a high risk of cancellation
Retaining employees is undoubtedly crucial to the success of any organization. For small teams, the importance of retention may be even greater (compare the overall impact of losing 1 of 4 consultants to losing 1 of 100). At first glance the impact of loss control systems on employee retention may not be clear. However, systems help to eliminate tedious tasks from consultants’ daily lives, allowing them to spend their time utilizing their unique skills and abilities as opposed to completing administrative, redundant, or low value add tasks. According to a joint 2016 study by the IBM Smarter Workforce Institute and Globoforce’s WorkHuman Research Institute, 81% of employees who believe their job makes good use of their skills and abilities report having a positive employee experience, while only 30% report a positive experience if they believe their skills are not appropriately used. Additionally, as the millennial generation comes into the workforce, there is a certain expectation of technology which needs to be met.
In a similar vein, recruiting new talent is a key focus for all organizations, and over the coming years will be a critical issue for those in the insurance space. It is common knowledge that the insurance industry (and loss control specifically) faces an impending labor shortage due to the industry’s aging workforce, with The Bureau of Labor Statistics predicting the industry will need to fill more than 400,000 jobs by 2020. The majority of these positions will by necessity be filled by the millennial generation. Millennials are now the largest generation in the U.S. labor force at 35%, and are set to represent 50% of the global workforce by 2020. Unfortunately, millennials’ perceptions of the insurance industry are not believed to be particularly positive. A study by The Institutes found that 8 out of 10 millennials are not familiar with the insurance industry, less than 1 in 10 were very interested in working in the industry, and 44% stated that the insurance industry sounds boring.
These statistics should certainly raise some red flags for those in the insurance and risk management professions. There is no doubt that the looming skills gap will take an immense amount of work to remedy and there is no one simple solution. However, in the case of millennials who have grown up utilizing a plethora of technological solutions to streamline their lives, we believe that organizations using outdated systems or no system at all are providing yet another roadblock to recruiting top millennial talent. While these recruitment difficulties will apply to the industry at large, they will also have a significant impact on small and mid-sized carriers.
In our experience we have found that risk control departments frequently face difficulties when requesting the significant IT resources needed to maintain and update legacy or custom-built systems. These difficulties are further amplified for organizations will small IT teams, who may already be tied up with other priorities such as core system replacements. Thankfully, fully configurable loss control systems are available that can be implemented and maintained with little to no IT resources. Our blog, The Evolution of the Loss Control System, provides a brief overview of the various ‘generations’ of loss control systems and the differences between them, including the necessary IT involvement.
We hope that you have found this blog helpful in addressing some of the common misconceptions regarding system effectiveness for small teams. If you would like to discuss how the RCT system can assist your team, contact us here.