Ventiv Resource Library
Issue link: https://ventiv.uberflip.com/i/438107
VENTIV TECHNOLOGY ////////////////////////////////// 3SIXTY º | 7 IT'S WELL KNOWN IN THE RISK AND INSURANCE WORLD that total cost of risk (TCOR) is an important way to help businesses allocate capital, protect assets and reduce volatility. Although TCOR is perhaps most often defined as the sum of risk management costs, risk retention costs, and risk transfer costs, every business measures it a little differently. For Ventiv RiskConsole client Cummins, Inc., TCOR comprises premiums, losses and all risk and insurance expenses. Cummins uses TCOR as a tool to capture, measure and analyze data, which is then used to design a strategy that supports the company's risk appetite. According to Samantha Jones, risk insurance analyst, Cummins risk management uses TCOR to show how it's performing and adding value to the company. Clearly, TCOR is very important to Cummins, which designs, manufactures, distributes and services diesel and natural-gas engines and engine-related components. Cummins generated $17.3 billion in sales in 2013, employs some 48,000 people and ser vices customers in 190 countries. In 2009, Cummins began a two-stage process of configur- ing RiskConsole to support the annual process of ascertaining TCOR, which focused primarily on preparing the data already held in RiskConsole's policy and claims modules for analysis and reporting. According to Jones, Cummins had three major challenges it wanted to address around measur- ing and reporting on TCOR: // An overwhelming amount of data to collect and organize from many international locations; // A strenuous, largely manual front-end data collection process; and // A manual process of integrating all data into a single spread- sheet, which was not only time-consuming, but also prone to error. Working with Ventiv account manager Tracy Harding, Cummins risk management set out to configure RiskConsole as a tool that would collect and measure consistent TCOR data year over year in a repeatable, sustainable way. Harding and the Ventiv team built two custom modules for the Cummins TCOR project: an expense module and a corporate profile module used by Cummins during renewals. Two standard modules already in use—claims and policy—rounded out the modules used. Ventiv and Cummins took a deliberate approach to developing the RiskConsole TCOR tool. First, they focused on a single category, like premiums, losses and so on. Next, they identified the data elements needed for each category. Then, they developed consistent calculations for all data elements. The second phase of the project focused on building automated reporting processes, eliminating multiple queries and manual spreadsheet consolidations. Ventiv and Cummins continued their deliberate approach here, too. The first priority was developing effective charts and graphs to show measurements. Then came careful evaluation of the outputs. And finally, Cummins and Ventiv worked together to identify the next steps to improve the efficiency of the process. The Risk- Console TCOR project has delivered on the goals originally set out for it. RiskConsole now supports Jones and her colleagues in their essential TCOR calculations and reporting. According to Jones, "TCOR is essential for representing the benefits of risk and insur- ance. So we present to our senior management and board once a year to show what value we add." In terms of efficiency, Cummins has realized strong results, as well, eliminating the five- to six- week process of collecting data and manually consolidating it in a spreadsheet. Solution Profile TCOR is essential for representing the benefits of risk and insurance. So we present to our senior management and board once a year to show what value we add. SAMANTHA JONES, RISK INSURANCE ANALYST, CUMMINS