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Pros and cons of bundled and unbundled RMIS systems

Each RMIS approach brings advantages and disadvantages

Pros and cons of bundled and unbundled RMIS systems

Companies have two major choices when considering adopting a risk management information system or moving to a new RMIS: bundled vs. unbundled systems.

RMIS systems — or data about risks an organization faces; controls to mitigate such risks; ways to finance those risks, including insurance; and ways to project potential losses — are bundled when provided by an insurer, broker or third-party administrator.

A bundled RMIS is offered at little or no additional cost to organizations beyond other services provided by the insurer, broker or third-party administrator.

An unbundled RMIS offers data portability in areas such as claims administration, exposure analysis and reporting. However, the cost of such a RMIS is added to that of other systems.

“The trendsetters tend to be the unbundled vendors because they sell their products for a price,” said David A. Tweedy, senior consultant and director of RMIS solutions at Sacramento, Calif.-based Bickmore & Associates Inc. “The bundled providers offer their wares as an add-on to an existing service.”

While unbundled RMIS have certain advantages, bundled RMIS “have access to vast amounts of claims data for analytics,” Mr. Tweedy said. “This is a huge treasure.”

Many unbundled systems use the subscription-based pricing common to cloud computing. Instead of a fixed initial price, the price of cloud-based RMIS is spread out over time and varies according to usage. Moreover, risk managers will need to familiarize themselves with other terms and conditions regarding data security, data ownership and disaster recovery spelled out in service level agreements signed with their provider.


“We happen to own a cloud company, so that helped me understand the Origami (Risk L.L.C.) service agreements,” said Julie A. Bean, risk manager for Elmhurst, Ill.-based The Duchossois Group Inc. Duchossois Group's companies include residential security, lighting commercial control and automation as well as gaming operations.

A limited number of providers offer bundled and unbundled RMIS, such as Atlanta-based Risk Sciences Group Inc., which announced a strategic restructuring in January that put the company's operations into bundled and unbundled divisions. The bundled operations tap resources of parent Crawford & Co. as well as sister company Broadspire Services Inc., a TPA.

“Bundled business allows us to leverage the strengths of our collective organizations to offer comprehensive products,” said Mark Stergio, CEO and senior vice president of Risk Sciences. “These partnerships also expose our products to what some may consider nontraditional RMIS markets.”

In the unbundled RMIS market, the emphasis is on customer service and helping risk managers consolidate data, Mr. Stergio said.

“Unbundled clients tend to be more sophisticated and demanding,” he said. “We can customize any screen for a client by configuring it as opposed to building from scratch.”

Bob Petrie, president of Glencoe, Ill.-based unbundled RMIS provider Origami, agreed that the ability to customize the data delivered and how it looks for a specific client's needs is vital to unbundled systems.

“Unbundled systems can support the needs of many client users — each with their own rights to view, edit, delete or add data — and provide granular security settings to support widespread secure use by client and client vendor employees,” Mr. Petrie said.

Moreover, unbundled RMIS tend to support integrating data from several sources and provide an integrated interface to claims data to support areas such as electronic data interchange compliance and utilization review, he said.


Mr. Petrie said the ownership of risk data also is important to risk managers.

“The processes and risk analysis performed by risk management departments may outlive any single relationship with a broker, TPA or carrier,” he said.

Another area of emphasis for unbundled RMIS providers has been on reporting functionality. For example, a risk manger with far-flung manufacturing operations could email a templated questionnaire in Origami's RMIS that guides users to a secure website and collects and analyzes the responses.

“Reporting and graphing capabilities in bundled RMIS systems vary considerably, but even the most advanced bundled systems have far fewer features and capabilities than unbundled RMIS systems do for risk analysis and reporting,” Mr. Petrie said.

Bundled RMIS providers also say their systems are evolving to meet the needs of risk managers in areas such as reporting.

Mike Strietelmeier, vice president of RMIS at The Travelers Cos. Inc., said more robust reporting dashboards, such as its e-Carma bundled RMIS, are an example of systems that have evolved from claims tools to true risk management tools.

“Our dashboards have enabled us to combine simplicity with powerful analysis to provide a straightforward and easy-to-use platform to deliver the information our customers seek to better manage their risks,” he said. “As risk management focuses have evolved from predominantly claim management to the total cost of risk, we have designed e-Carma to support the full range of risk management responsibilities that our customers have.”