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U California Multi-Year Initiative Cuts Risk Management Costs

The University of California (UC) has gone public with details about a multi-year risk management initiative that has reduced the cost of risks for the university system by $380 million since 2004. The program introduced a cross-campus portal it calls the Enterprise Risk Management Information System (ERMIS), built on IBM's Cognos business intelligence software.

Beginning in 2007 IBM began working with the university system's Office of Risk Services to design and build the system to help manage liabilities across UC's 10 campuses, five medical centers, laboratories, and field sites that are home to 400,000 students, faculty, and staff. The goal of the project is to be able to manage all areas of risk across the UC system by monitoring, tracking, and creating a unified database that can be mined locally by campuses and at a system-wide level, so that trends can be spotted early and acted upon.

The system was initially deployed in February 2009, then rolled out to all 10 campuses in March and April of that year. Eventually, the portal will include numerous dashboards to allow risk managers to assess their performance relative to peer organizations, determine best practices, and implement risk mitigation strategies.

"The best way to mitigate risk is through prevention and preparation, and IBM's analytics technology provides us with the real-time data we need to be able to do that," said Grace Crickette, chief risk officer for UC. "This is a first-of-a-kind system that allows us to get a meaningful understanding, at both a campus and system wide level, of the current state of the UC system's level of risk, and document the best practices that allow us to manage and reduce it."

An initial effort in the project focused on workers compensation trends. The data roll-up has allowed UC to deploy resources where most needed to invest in loss prevention and control. Spotting trends--such as the need for lifting devices in food services--allows the institutions to institute new training programs, introduce new equipment, focus on accountability with management, and work with employees directly.

"We are now able to determine where we are the most vulnerable by creating dashboards so managers can access their data in real time," Crickette said. "They can target the key variables that influence outcomes and make changes to increase productive trends or intercede in operations that are having a negative impact."

Traditionally, risk management programs have relied heavily on quantitative analysis, but lacked qualitative measures and analysis. UC's new system employs both a quantitative and qualitative approach. As Crickette explained, data is being pulled into the ERMIS data warehouse that drives the reporting tools from a multitude of sources, including worker surveys on safety, Excel spreadsheets developed in individual campus risk assessments, and data from unstructured events.

According to Crickette, the effort has reduced the cost of risk--including all retained losses, excess premiums, investment in loss prevention and loss control, and administrative costs from $18.56 per thousand dollars of operating budget to $13.31 per thousand dollars. "This means we're able to put that money back into the mission of the university," she added. "We charge an internal insurance rate to all our locations, and we're able to reduce that rate. We've been able to refund millions of dollars to campuses that they can use for their operations."

About the Author

Dian Schaffhauser is a former senior contributing editor for 1105 Media's education publications THE Journal, Campus Technology and Spaces4Learning.

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