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Integrate Data to Harness its Risk Management Power

Risk managers should take the lead in implementing an integrated data system for all parts of their organization.
By: | February 17, 2017 • 5 min read

Risk management isn’t what it used to be.

Risk managers, CFOs and corporate boards no longer have the luxury of focusing on a defined, static set of risks. Global risks proliferate in number, type and complexity, and the risk environment is changing at an ever-faster pace.

In this environment, organizations must preempt if they can, and be able to adapt and react quickly if they can’t. Efficiency and proactivity aren’t just desirable, they’re essential.

“The approach to risk management needs to change. In addition to responding quickly as events unfold, risk managers need to have the tools to see what’s coming, and the voice to get the attention of senior leaders,” said Quin Rodriguez, Vice President, Strategic Marketing, Riskonnect.

Often, businesses already have what they need to speed up their reaction time and whittle out inefficiencies in risk management: data. Data can provide insight into a company’s key vulnerabilities, and clues for effective risk management strategies. The problem is that the data is siloed in separate administrative systems. Sharing data among different teams and corporate functions allows an organization to take a more integrated approach to risk management. Risk managers just need the tools to do it.

“Integrated Risk Management involves converging data from different sources within the business to provide the C-suite with a strategic view of its exposures. It’s opening windows in the silos to create communication channels and enable data-sharing,” Rodriguez said.

When data is presented in an integrated way, it reveals the totality of risk exposure and provides a top-down view of operational risk data including claims and incidents, which may allow executives and senior managers to identify systemic, organization-wide risks that previously went unrecognized due to departmental silos.

To understand the full scope of risk, organizations need data from all business units and risk and compliance functions, as well as from business partners, suppliers and outsourced vendor services.

“It’s hard to see and appreciate the impact of any risk, much less do anything about it, when you’re only looking at them individually and over a short period of time,” Rodriguez said. “Integrated data enables strategic, real-time decision making with the long view in mind.”

A Platform for Data Sharing

Gartner defines Integrated Risk Management as “a set of practices and processes supported by a risk-aware culture and enabling technologies, that improves decision making and performance through an integrated view of how well an organization manages its unique set of risks.”

Quin Rodriguez Vice President, Strategic Marketing

Despite the benefits of streamlining data systems and sharing information across an organization, a 2015 survey conducted by Gartner revealed that nearly 40 percent of its clients were not using software for governance, risk and compliance, or what is now referred to as IRM. Sixty-five percent of clients were not even familiar with the term GRC. And yet, a separate survey of global executives revealed that 65 percent of execs saw investment in risk management as “falling behind.”

Why aren’t more organizations investing in updated risk management practices and taking an integrated approach? Rodriguez said there are shortfalls in both organizational cultures of risk awareness, and in the availability of enabling technologies.

“The technology hasn’t quite been there,” Rodriguez said. “Many vendors have built one-off and niche solutions to meet demands as they arise, resulting in different apps for claims management, safety reporting, internal audit, etc. But there has been no one solution where the data is all accessible at once.”

Riskonnect offers the platform and data services that can unify these separate and siloed solutions. Consolidating claims data, safety reporting, training documents, compliance reports, and other risk management information under one unified hierarchy eases data-sharing without compromising data integrity. It allows risk managers to see the full impact of each risk and understand them in context.

Take the example of a fast food restaurant. A patron comes in for lunch and discovers a bone in his chicken sandwich, which is a safety risk for the customer and a liability risk for the restaurant. The customer complains to the manager, who files an incident report. Then the unhappy customer goes home and shares his experience on social media, denigrating the restaurant for its poorly prepared food. Now that bone is a reputational risk that could affect other restaurant locations as well.

“What we’re seeing is these risk managers are having greater visibility into these risks, and they’re starting to ask us for more information,” Rodriguez said. “They want to be able to see the operational impact of a reputational risk and determine how to mitigate it.”

Rodriguez described another client who was seeing a lot of claims tied to environmental health and safety, but couldn’t determine where the common vulnerability was that was allowing things to slip through the cracks. Part of the problem was that the claims management team and the safety team weren’t communicating.

If there was an injury, the safety team would file a report, but the claims team did not have access to their system and thus could not see the report. They would not know about the incident until the injured employee filed a workers’ compensation claim.

“Safety reporting should be tied to claims, which should be tied to safety auditing,” Rodriguez said. “The injury report should be filed in the same system as claims so that the claims team can identify that report as a potentially insurable risk. When data is integrated, they know what’s coming.”

“Any time you can break down the silos and create common sources of data, normalize them, and ease communication, you achieve an integrated risk management approach that ultimately helps to create efficiency and mitigate losses,” Rodriguez said.

Implementing Integrated Risk Management

Switching to one unified system works best when there is support from all departments. Managers of different business units will need to expand their view outward and look to synchronize their data collecting and reporting with their counterparts throughout the organization.

But there are also needs to be an appetite for integration at the executive and board level, Rodriguez said.

“We have clients that use five, six, seven different solutions of ours and may not have the required appetite to really normalize that data at the C-suite level. There needs to be a desire at that level to really put data to work and develop a purpose for it,” he said. “Otherwise, they’re just going to get another dashboard.”

This is where risk managers can take a leading role and elevate their strategic contribution to their organization.

“Risk managers already collect so much information, but with an integrated risk management approach they can bring better data to their bosses that has a clear purpose,” Rodriguez said. “Harnessing shared data can get risk managers a seat at the table.”

To learn more about integrated risk management solutions, visit https://riskonnect.com/.

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This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Riskonnect. The editorial staff of Risk & Insurance had no role in its preparation.




Riskonnect is the only global provider of Integrated Risk Management technology solutions. Built on the world’s leading cloud platform, Riskonnect finally allows you to break down the silos and unite your entire organization.

Robotics Risk

Rise of the Cobots

Collaborative robots, known as cobots, are rapidly expanding in the workforce due to their versatility. But they bring with them liability concerns.
By: | May 2, 2017 • 5 min read

When the Stanford Shopping Center in Palo Alto hired mobile collaborative robots to bolster security patrols, the goal was to improve costs and safety.

Once the autonomous robotic guards took up their beats — bedecked with alarms, motion sensors, live video streaming and forensics capabilities — no one imagined what would happen next.

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For some reason,  a cobots’ sensors didn’t pick up the movement of a toddler on the sidewalk who was trying to play with the 5-foot-tall, egg-shaped figure.

The 300-pound robot was programmed to stop for shoppers, but it knocked down the child and then ran over his feet while his parents helplessly watched.

Engaged to help, this cobot instead did harm, yet the use of cobots is growing rapidly.

Cobots are the fastest growing segment of the robotics industry, which is projected to hit $135.4 billion in 2019, according to tech research firm IDC.

“Robots are embedding themselves more and more into our lives every day,” said Morgan Kyte, a senior vice president at Marsh.

“Collaborative robots have taken the robotics industry by storm over the past several years,” said Bob Doyle, director of communications at the Robotic Industries Association (RIA).

When traditional robots joined the U.S. workforce in the 1960s, they were often assigned one specific task and put to work safely away from humans in a fenced area.

Today, they are rapidly being deployed in the automotive, plastics, electronics assembly, machine tooling and health care industries due to their ability to function in tandem with human co-workers.

More than 24,000 robots valued at $1.3 billion were ordered from North American companies last year, according to the RIA.

Cobots Rapidly Gain Popularity

Cobots are cheaper, more versatile and lighter, and often have a faster return on investment compared to traditional robots. Some cobots even employ artificial intelligence (AI) so they can adapt to their environment, learn new tasks and improve on their skills.

Bob Doyle, director of communications, Robotic Industry Association

Their software is simple to program, so companies don’t need a computer programmer, called a robotic integrator, to come on site to tweak duties. Most employees can learn how to program them.

While the introduction of cobots into the workplace can bring great productivity gains, it also introduces risk mitigation challenges.

“Where does the problem lie when accidents happen and which insurance covers it?” asked attorney Garry Mathiason, co-chair of the robotics, AI and automation industry group at the law firm Littler Mendelson PC in San Francisco.

“Cobots are still machines and things can go awry in many ways,” Marsh’s Kyte said.

“The robot can fail. A subcomponent can fail. It can draw the wrong conclusions.”

If something goes amiss, exposure may fall to many different parties:  the manufacturer of the cobot, the software developer and/or the purchaser of the cobot, to name a few.

Is it a product defect? Was it an issue in the base code or in the design? Was something done in the cobot’s training? Was it user error?

“Cobots are still machines and things can go awry in many ways.” — Morgan Kyte, senior vice president, Marsh

Is it a workers’ compensation case or a liability issue?

“If you get injured in the workplace, there’s no debate as to liability,” Mathiason said.

But if the employee attributes the injury to a poorly designed or programmed machine and sues the manufacturer of the equipment, that’s not limited by workers’ comp, he added.

Garry Mathiason, co-chair, robotics, AI and automation industry group, Littler Mendelson PC

In the case of a worker killed by a cobot in Grand Rapids, Mich., in 2015, the worker’s spouse filed suit against five of the companies responsible for manufacturing the machine.

“It’s going to be unique each time,” Kyte said.

“The issue that keeps me awake at night is that people are so impressed with what a cobot can do, and so they ask it to do a task that it wasn’t meant to perform,” Mathiason said.

Privacy is another consideration.

If the cobot records what is happening around it, takes pictures of its environment and the people in it, an employee or customer might claim a privacy violation.

A public sign disclosing the cobot’s ability to record video or take pictures may be a simple solution. And yet, it is often overlooked, Mathiason said.

Growing Pains in the Industry

There are going to be growing pains as the industry blossoms in advance of any legal and regulatory systems, Mathiason said.

He suggests companies take several mitigation steps before introducing cobots to the workplace.

First, conduct a safety audit that specifically covers robotics. Make sure to properly investigate the use of the technology and consider all options. Run a pilot program to test it out.

Most importantly, he said, assign someone in the organization to get up to speed on the technology and then continuously follow it for updates and new uses.

The Robotics Industry Association has been working with the government to set up safety standards. One employee can join a cobot member association to receive the latest information on regulations.

“I think there’s a lot of confusion about this technology and people see so many things that could go wrong,” Mathiason said.

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“But if you handle it properly with the safety audit, the robotics audit, and pay attention to what the standards are, it’s going to be the opposite; there will be fewer problems.

“And you might even see in your experience rating that you are going to [get] a better price to the policy,” he added.

Without forethought, coverage may slip through the cracks. General liability, E&O, business interruption, personal injury, cyber and privacy claims can all be involved.

AIG’s Lexington Insurance introduced an insurance product in 2015 to address the gray areas cobots and robots create. The coverage brings together general and products liability, robotics errors and omissions, and risk management services, all three of which are tailored for the robotics industry. Minimum premium is $25,000.

Insurers are using lessons learned from the creation of cyber liability policies and are applying it to robotics coverage, Kyte said.

“The robotics industry has been very safe for the last 30 years,” RIA’s Doyle said. “It really does have a good track record and we want that to continue.” &

Juliann Walsh is a staff writer at Risk & Insurance. She can be reached at [email protected]