Core systems projects are typically one of the largest undertakings from a technology perspective that an insurance company will undergo. Whether this be a claims, policy administration, billing, or imaging (document management) systems, the scale of these projects are enough to consume even some of the most robust IT departments in insurance. With a typical implementation process taking several years for some of the larger projects this can significantly limit the IT availability for other departments that thirst for new technology before this multi-year long drought is over. This is a particularly prevalent issue today in insurance because so many companies are completely overhauling core systems as they undertake a ‘digital transformation’. Loss Control and Risk Management are traditionally one of the departments pushed aside in the wake of a large IT project. Even if a Loss Control team has no technology in place to automate their workflow or mine the valuable data they are collecting on a daily basis, they are almost always of lower priority to that of a sizeable project.
So what is a loss control leader to do?
How do you increase the internal awareness/importance of loss control?
How do you gain an appropriate IT budget and/or resources to work on your project?
Here are some ideas how:
- Quantify impact
Build case studies and ROI analyses demonstrating the bottom line impact that your team has contributed to the organization. Typically, Loss Control is not considered a profit-centre from the executive perspective, as typically loss control services are value-adding rather than revenue-generating (with some exceptions). Because of this assumption, quite often loss control is overlooked from a budgetary and priority perspective when put next to an overhaul of underwriting or claims technology. It is important to convey value in a quantifiable, metrics-driven approach as this is consistent with the attainment of resources in the practice of good management. There is no doubt that without a centralized loss control database this can be difficult, however it is essential for promoting investment in the discipline of loss control.
In the absence of detailed metrics, we have seen clients be successful in sharing ‘loss control success stories’ about key accounts which have experienced major impacts due to the loss control services delivered.
- Purchase a configurable solution versus building one
Many loss control executives don’t realize this but they can buy an off-the-shelf Loss Control Management System that does not require significant IT resources to implement and maintain. A configurable solution will allow you to implement a state of the art system using business team resources. IT teams often assume that providing loss control functionality is generally a simple build or add on to underwriting functionality, however, this is far from accurate. A loss control team requires specific functionality to meet their unique needs and requirements.
Sticking to core competencies is a crucial ideology in any industry as it is more likely to translate to operational success. Simply put, an insurance entity’s IT department does not have the same level of knowledge for an ultra-niche area like loss control that it does in more broad topics such as underwriting. These specialists, however, do exist outside of the organization. As a simple parallel; If you wanted an automobile of specific make and model would you hire a team of airplane mechanics to build you one, or would you simply go to the auto-dealership next door?
- Get a quick win under your belt from time to time
One chronic side-effect of multi-year core system replacement projects is project fatigue. It is very difficult to keep a team motivated with such long success horizons, so what a number of our clients have done effectively is sprinkled less complex, less risky implementations throughout the timeline of the major project to show quick, incremental wins. Whether this be a loss control solution or a learning management tool, these low risk projects can provide a needed reason to celebrate amongst the daily grind of project life within the organization.
- Phase it out
Although some may view loss control as a ‘non-core’ solution, there are significant benefits to having it integrated within your major system infrastructure. To be able to integrate with underwriting, claims and document management systems obviously, these systems must not be in flux or in the midst of replacement. It’s your classic chicken-or-egg problem.
Luckily, for the loss control team, approximately 70-80% of the overall benefit of a loss control platform can be achieved using the solution on a standalone basis, without core system integrations. Whether this means bulk loading data using a business user-friendly simple import tool or manually attaching the completed documents into the document management system for delivery to an underwriter, these trade-offs are minimal when weighed against the benefits gained by the user base of their new loss control functionality. Once the core system projects are completed, the integration can be conducted as a day-2 project, which will simply provide additional benefits and workflow efficiencies to users.
There is often a side benefit to this approach as well. By using the system on a standalone basis, the loss control team has the ability to refine their workflows and data capture in order to ensure a smooth integration process. When doing this day-1, there can often be certain false assumptions made as to how the loss control solution will be used by the team which can lead to integration rework down the road.