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BRINGING RISK MANAGEMENT TO THE DESKTOP

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Creating their own Intranet sites can let risk management departments focus on strategic thinking and let the site help handle routine questions and insurance tasks.

Also, an online system can easily be updated, unlike a widely distributed printed risk management manual, and a link to a broker can even allow employees to perform insurance transactions without involving the risk management department.

Creating an online risk management site provides a number of advantages over a printed manual, consultants said.

The sites also provide challenges, such as the ever-present need for updating information and making sure some information does not get into the wrong hands.

Perhaps the most important benefit is the ease with which information can be sent to numerous people in an organization, said Dave Tweedy, president of Tweedy Risk Consulting Inc. in Barrington, R.I.

"You can get out the maximum amount of information in a short amount of time," he said.

Providing information to employees reduces the number of calls made to the risk management department. About 80% of all questions put to the risk management department could be answered with an online manual, estimates Ellen Walker, vp of interactive client services at J&H Marsh & McLennan in New York.

But a system also can generate an increase in other types of calls, Mr. Tweedy said. As employees read the online manual, they might think of risks they previously hadn't considered, leading to more calls to the risk management department. But, he said, this could be a good thing, since the risk manager's role is to generate awareness among employees of potential risks.

An online manual also is cheaper to update compared to printing new manuals or supplying printed updates, consultants said. In addition, sites can be searched electronically, unlike a printed manual.

"The Intranet provides solutions to current limitations of data and sharing it with other people," said Mark Dorn, president of DORN Technology Group Inc. in Livonia, Mich.

An Intranet site can be a valuable tool helping risk managers achieve their strategic goals, Mr. Dorn said. "It needs to be part of a technological strategy you are implementing in the risk management department," he said.

Online manuals also can include video clips, sound and pictures as well as links to Internet sites on related topics. "The printed manual is very one-dimensional. The most it can provide is a picture," Mr. Dorn said.

Also, a site can increase the visibility of the risk management department within an organization, Mr. Tweedy said.

Online systems can be upgraded to permit insurance transactions. By linking a system to the insurance broker's or insurer's computer system, employees can apply for certificates of insurance through the sites. This eliminates the need for the broker or insurer to re-enter the data, and that decreases inputting errors. "The fewer mistakes, the fewer headaches," Ms. Walker said.

As the information is sent to the broker or insurer, it also is sent to the risk management department, where it can be accumulated and analyzed.

One company has had great success with its risk management site on an internal Intranet.

FMR Corp. opened the site on the company's Intranet in November 1996, and the results have exceeded expectations, said Judy Lindenmayer, vp-Fidelity insurance and risk management for the Boston-based company better known as Fidelity Investments.

"We didn't dream it would be so widely used as it is," said Ms. Lindenmayer, the 1997 Business Insurance Risk Manager of the Year.

The site is part of FMR's companywide Intranet available to all its employees. It contains the company's risk management manual and general information that informs every employee of insurance policies and procedures. Also, the site lists people to contact in the risk management department to answer specific questions.

But knowing who to call doesn't mean they have to call. Because of the site, calls to the risk management department are down 75%, Ms. Lindenmayer said, freeing up the risk management personnel. "It empowers our people to do their jobs in a more efficient manner," she said.

The site also allows employees to receive certificates of insurance directly from the broker by completing an online application.

In developing the site, the company was concerned that providing too much information would take important insurance decisions out of the hands of the risk management professionals, said Tom Wronski, FMR's risk manager.

The company wanted a system that could answer routine questions, "but we didn't want to get into super detail for fear that someone will make their own coverage decisions," Mr. Wronski said.

But that's not a major concern and certainly is easily outweighed by the advantages of an online site, said Ms. Walker of J&H Marsh & McLennan. She added that any person who made a coverage decision on his or her own probably would have done it even if he or she didn't refer to an online manual.

Another company has created two Intranet sites for its risk management department.

In April, E.I. Du Pont de Nemours & Co. put its risk management manual on the company's Intranet.

At the same time, it created a second site accessible only by the company's risk management professionals, said Bruce Evancho, manager-corporate insurance and risk management for the Wilmington, Del.-based chemical maker.

This two-tiered system gives all the company's employees access to important risk management information while also allowing the risk management professionals, scattered in offices around the world, to share technical information.

"It's our way of creating an electronic file cabinet for the global operations," Mr. Evancho said.

Like the Fidelity site, Du Pont's regular site allows employees to obtain certificates of insurance, eliminating the involvement of the risk management department, Mr. Evancho said. The previous method required the employee to call the risk management department and provide the necessary information; then the information went to the broker, who issued the certificate.

But the Intranet is linked directly to the broker, J&H Marsh & McLennan. The broker automatically approves requests for standard certificates, about 90% of all requests. For the remaining requests, the broker has standing orders to call the risk management department for review, Mr. Evancho explained.

Both sites were set up in about a month using Microsoft Frontpage software costing about $150, said David Baca, senior insurance adviser for Du Pont. He did the work himself. Also, other software allows documents on a company computer to be linked to the Intranet. So, Mr. Baca explained, if a linked document gets changed, it automatically gets updated on the Intranet, eliminating the need for time-consuming changes on the site.

The site has meant the department receives fewer calls, and simple insurance tasks now are completed without contacting the risk management department.

"Now they can go to the Intranet and educate themselves," Mr. Baca said.

Also, with the second, technically oriented site, risk management professionals can pool information. For example, when someone makes a presentation, it can be put on this site, and others can view it or borrow ideas for their own presentations, Mr. Evancho said.

But obtaining certificates of insurance through the Intranet still is not the utmost use of the technology. Fully interactive use of the site, even beyond requesting certificates of insurance, is possible, consultants said.

A more advanced system would put the company's RMIS system on the intranet for all to use, said Allen Monroe, chief executive officer of RiskINFO in Larkspur, Calif.

Such a system would combine the insurance information with data collection and analysis tools, essentially creating a new risk management system, Mr. Dorn said.

Online systems, however, are not free of concerns, consultants said.

Because an online manual is expected to be up-to-date, risk managers must constantly maintain it. "A risk manager is really on the hot seat to make sure it's accurate, timely and addresses a specific need," Mr. Tweedy, the risk consultant, said.

Security also is an issue. With sometimes sensitive information on an Intranet, it needs to be secure. This is accomplished by allowing access only to those with passwords or encrypting the data and limiting more sensitive data to certain employees.

At Du Pont, for example, an extra password is needed to access the technical site. Only risk management personnel get that password. Another password is needed to go from their system to their brokers' Intranet, providing an additional layer of security.

Another means of security is limiting the information on the site. Neither the Fidelity nor Du Pont sites contains confidential legal information or detailed claims information that might be damaging or embarrassing in the wrong hands.

One important difficulty in establishing a system is persuading people to use it. In companies with employees familiar with a computer and the Internet, such as Fidelity, this is easy. But other companies might face a tougher transition to the new system, consultants said.

"Getting people over the hump in breaking the habit of calling the risk management department is the hard part," Ms. Walker said.

She recommends a public relations campaign to tell employees of the system's existence. Next, the printed manual should no longer be published. If that fails, she says, the risk management department should simply stop answering questions over the phone if the point is covered by the site.