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8 Strengths of A Powerful and Practical Insurance ERM Framework

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8 Strengths of A Powerful and Practical Insurance ERM Framework

Small insurers hold an advantageous position in the industry. Their flexibility allows for speed and customization. They offer and manage traditional and non-traditional insurance policies while accessing similar digital tools and insurance underwriting software as their larger, and less personable, competitors. By leveraging the power of ERM frameworks, small insurers are able to assess risk across multiple factors and provide deep data analysis that positively informs decision-making.

Here are eight essential strengths that insurance management software brings to small and mid-size insurance providers.

Integrated Systems and Lifecycle Management

Integrating systems across silos in a secure and efficient manner offers new opportunities to engage with third-party providers, improve communication, speed data transfer and customize policies for a range of clients. Through a single dashboard, stakeholders can manage policies, update information in real-time and begin claim support and filing regardless of time zone. This results in rapid claim closures and eliminates duplicate processes.

Aligned Processes

In keeping with the importance of integrated systems, aligned processes ease the transition from an insurance culture to a risk culture. Risk culture occurs when an organization takes risk management into account throughout all decision-making and processes, from IT decisions to actuarial to finance. An ERM framework embeds risk into every decision and process, increasing value for all stakeholders.

Quality Data

Successful data-driven decision-making relies on accurate, relevant data. Powerful ERM frameworks make it possible for data to exist in a dynamic environment that integrates databases with analytical tools and calculation engines. Limiting siloed data and building connections across disparate sources allow for higher quality data and easily performed audits.

Holistic Viewpoints

By integrating various data sources, analysts are able to dig deeper into the meaning behind patterns. These patterns can be driven by a multitude of factors from environmental changes and climate to personality and geography. By combining qualitative factors with quantitative data, underwriters develop a more accurate picture of risk.

Precise Risk Identification and Informed Decision-Making

Automated data collection of both qualitative and quantitative factors allows underwriters to engage in precise risk identification. ERM frameworks, to include insurance underwriting software, automate quality checks and “clean” data as it arrives from multiple sources. This results in a single data source from which decisions are made. Since every decision-maker is working from the same source, contradictions and miscommunication are fewer and efficiency increases across the entire organization.

Technical Infrastructure

An ERM system is poised to succeed only if the technical infrastructure it supports parallels the organization’s values and priorities. Achieving buy-in from all stakeholders, especially those in positions of authority, leads to ERM success and improved processes across the organization.

 

 

Breanna Schmidt