An effective way of encouraging insurers to adopt risk management strategies is through the implementation of a RAOM. The Accenture RAOM Approach was first described in “A New Risk-Adjusted Operating Model for the Insurance Industry”. The RAOM can help insurers build robust risk-management capabilities which are consistent with their target level of sophistication. There are four key phases in the RAOM Approach:
A RAOM implementation can help generate multiple benefits for insurers. Applying the RAOM consistently throughout the organization can help achieve a positive impact on both the top and bottom lines. In our view, RAOM can benefit insurers by adding value along the following dimensions:
- Increased enterprise value
- Improvement in business results
- Enhanced operational efficiency
The figure below presents RAOM benefit drivers and the possible value generated for insurers:
In order for the RAOM to be successful, we need to take into account a number of additional elements. In my next post, I will discuss the most important among them.
To learn more, download: Risk-Adjusted Operating Model: Transformation Strategy for Insurers.