RiskMark: FM Global.
RiskMark is a global, fact-based, property risk-quality benchmarking tool available to risk managers. It was launched in 2009.Trademarked in the United States and based on FM Global's more than 175 years of loss prevention engineering and loss experience, this Web-based analytics tool allows risk managers to:
* Benchmark the risk quality of their locations.
* Define the basis for prioritizing risk improvement.
* Administer scenarios to maximize the impact of their limited risk improvement budgets.
In turn, risk managers are empowered to make better, more-informed risk management decisions, which enable them to drive risk improvement efforts and ultimately protect their company's bottom line.
Why It Is Different
RiskMark empowers today's risk managers to:
* Identify risk using the tool as a bottom-line indicator of risk and the potential for major losses; the adaptation of this metric by users aims to drive and even accelerate risk improvement.
* Quantify risk by facilitating risk identification, risk control and risk assessment and providing the business case for why risk improvement may be necessary.
* Prioritize risk by allowing users to make theoretical improvements using the online tool to see how those improvements will affect the overall risk score for a specified facility.
Users can see risk quality scores for each of their company's facilities--scores that can range anywhere from 1 (poor risk quality) to 100 (high risk quality).These scores have been proven to correlate with loss expectancy and a company's earnings stability. So, risk managers can see how they compare to industry peers/competitors across tens of thousands of FM Global-insured locations around the world and the site's risk improvement potential and past/projected future risk improvement.
How They Did It
Six core FM Global employees were on the development team representing operations, engineering, products and systems development and research. They spent more than 12,000 hours from 2004 to 2009 completing this project. The technology delivery was completed in 15 months by 16 software developers, 11 quality assurance professionals and seven business analysts. Several technologies were used to deliver the project, including Microsoft .NET;Web services, SQL Server; Web-enabled graphics for charts and reports; and a platform for delivery of mission-critical data.
FM Global set two key metrics in advance to measure the success of RiskMark post-launch--client acceptance and client feedback. In terms of acceptance, today more than 90% of FM Global's clients are actively using RiskMark to support their company's risk management efforts. FM Global also offered this case history: A large Germany-based dairy food products company with a low RiskMark score had four key locations valued at $700 million. The company only had $269,000 in its risk management budget to invest in physical risk improvements. The company originally surmised it might be best to invest that $269,000 in the facility with the lowest risk quality. RiskMark showed them that such an investment, in accordance with FM Global's loss prevention recommendations for that location, would reduce the company's loss expectancy by $168 million. However, RiskMark's scenario planning tool showed the company could take the money and invest it across all four of their sites by following engineering recommendations at each location that would have the biggest impact. The company chose that scenario and reduced loss expectancy by $1.1 billion. The RiskMark tool was able to highlight and increase the reward for capital expenditures and help the company determine the best recommendations to complete, given its priority and budget.
"The data is presented in the form of a decision tool that uses FM Global's long and extensive loss experience to identify the most-efficient ways a client firm can reduce its expected loss costs at its various locations and facilities. It is client-focused in that it enables client firms to take actions that reduce their claim frequency and severity and, therefore, their loss costs. It achieves this objective by gathering or assembling and making available to clients, in a convenient format, relevant data to which clients would not normally have access."
William Panning, executive vice president, Willis Re
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|Title Annotation:||INNOVATIORS SHOWCASE: Risk Management|
|Date:||Jan 1, 2012|
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