Understanding the Risk Factors of Your Business Forms
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From climate change and financial instability to cybersecurity threats, the insurance industry is grappling with plenty of risk as we emerge from three years of pandemic. Forms used to conduct business represent the one area of risk that often flies under the radar but is critical to every aspect of interaction in the insurance industry. While digital transformation is continuing to alter the way insurance companies communicate with clients, forms remain integral—making proper forms management a must. Forms are also the only tangible product your customers walk away with and, as such, reflect your company’s brand and present a marketing opportunity. When preparing forms for external distribution, it is important to make sure they reinforce the relationship of trust between you and your customers.
Forms are used and sent externally at numerous touch points along the customer journey. Forms are also used internally by employees when hired and as part of their regular tasks throughout their employment. Forms generate all kinds of data that enter an insurance company’s IT systems, making them the source for a variety of risks. With so much data at stake, it’s critical to have a process for identifying possible risks associated with your forms.
How can you optimize risk identification to effectively manage the forms that are vital to your organization? Here are four questions to ask:
What are the risks when it comes to forms?
Identifying risk factors associated with each form is the first step to a thorough risk assessment. Non-compliance with changing regulatory requirements poses the opportunity for potential penalties and fines and reputational damage. However, other potential risk factors include the target audience (e.g., persons who fill, receive and handle the forms and could be affected), the importance of the form to business operations, forms production or development complexity, usage frequency and authenticity of signatures. Even something as simple as the lack of availability of a particular form can put your company at risk. An effective forms management program identifies risk factors relevant to your organization’s business while retaining enough flexibility to add other factors as things evolve in the future.
What are the impacts of identified risks?
Once you have identified your potential risk factors, you will want to assess the impact each of these factors might have on your business. Impact refers to the undesirable effects or consequences that the occurrence of a risk (e.g., action, event) may have on the people, projects and other elements associated with your business. Ensuring each staff member that deals with forms understands the criticality of each form and its importance to your organization is also key.
Other questions to consider:
- Is the form driving your company’s business activities, making it critical to operations?
- Would a stockout or malfunction of this form result in reputational damage to your company, in loss of business or financial revenue, or in business operational failure?
- Could there be a risk of legal suit or financial cost or loss stemming from mistakes in design or distribution?
When evaluating the risk impact each form poses, don’t overlook the experience of your target audience. If forms are going to customers or the public, it’s particularly important that they are clear and easy to read as every statement, invoice, automobile insurance card or claims document represents a contract between you and your customers.
How can I assess the likelihood of form-related risks in my organization?
In addition to identifying specific risks and assessing their impact, calculating the likelihood that a risk will occur is essential because any event that impacts business operations could result in loss of revenue, loss of clients or loss of reputation. In the context of forms management, one of the most important factors to consider when determining likelihood is the complexity of your forms. While a simple form may reduce the likelihood of a disruption to business operations, development of complex forms increases the potential for disruptive events to occur. Forms are considered complex if they create a large amount of data capture, require connectivity to other systems and databases, contain multiple pages with a lot of programming (programmed data field and events with workflow), or are produced in multiple output formats or versions.
What mitigating measures can my business take?
It may not be possible to eliminate all risk, but establishing mitigation procedures can reduce risk to a reasonable and appropriate level. When developing a risk mitigation strategy, first pay attention to the format of your forms. The risk mitigation strategy relevant to printed forms will look very different from those used with digital forms delivered via a mobile app or other device. For example, mitigating measures for printed forms might be reducing the risk of stockout of a critical form for business operations. Mitigating measures for electronic forms might involve establishing a close relationship with IT to ensure the system infrastructure is robust enough to support expected user traffic or to be advised of any upcoming software implementations and upgrades in time to assess the impact on your digital forms.
After exploring the overarching questions to consider when assessing the impact a form has on your business, you’ll want to have a method for prioritizing your risk mitigation strategies using objective criteria. Whether you are a forms management professional or someone who interacts with forms in some capacity, knowing what questions to ask when it comes to calculating risk can help you prevent forms from becoming business liabilities.
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