Risk Management Information Systems - Average RMIS Costs and RMIS Market Drivers

Average RMIS Costs and RMIS Market Drivers

The cost of a typical independent RMIS product varies from $60,000 to $150,000 for the first year, and ongoing annual charges are slightly less. Insurance company RMIS product lines typically average around $50,000 for the first user, but they often offer less expensive light-weight versions for claim look-up only. More costly full-featured products are sometimes available with more advanced reporting systems. The products are usually priced on a per-user basis on a sliding scale for a larger number of users. Insured clients' brokers are given access at no cost or occasionally for a flat annual fee for multiple insured clients with a particular broker.

TPAs commonly include one or two RMIS access IDs within their claims management pricing to encourage both the client's broker and the client to use their claim look-up product. Normally, beyond the first two access IDs, the pricing follows the same per-user range of the insurance companies. The cost drivers of RMIS include: • Number of user/access IDs • Number of outside claim data sources that must be converted (carriers and TPAs do not have to convert their own data) • Frequency of outside claim data updates • Special programming/report development charges • Training of users (initial and annual users' conferences)

Clearly, higher cost systems do not always correlate to better performance in terms of both usefulness and speed. While most carrier and TPA RMIS systems are similarly priced, the independent RMIS vendors' price range varies significantly, as previously mentioned.