When Steve dropped by yesterday and mentioned the broad subject of the so called “science” behind the Slabberator (also known as an Enterprise Risk Management dashboard) being a target rich environment he was not kidding. Stick with me on this post folks – some of the concepts get complex but I think if we can connect enough dots, especially in light of the recent financial meltdown, it will make some sense to even the most financially challenged among us.
By now we have produced enough links to verify that the existence of this contraption dubbed the Slabberator by Editilla is a given including it’s use in risk management at the enterprise level.
To me this begs some questions about whether the logic behind the dashboard holds water, especially in light of the current financial meltdown and whether or not it could explain some of the kookier recent P&C industry moves such Allstate’s unsuccessful rate and document battle with noncaptured insurance commissioner Kevin McCarty and State Farm’s subsequent request for 47% rate increase in Florida despite it’s withdrawal from coastal markets there. IMHO the science behind the slabberator is bogus and ultimately results in ordinary people being slabbed through denial of claims or very high insurance rates. Let’s start with the link left by Steve last night here on slabbed and a bit more from the article on ERM itself.
In 2004, the company “officially went live” with ERM and committed to this quantitative approach to risk management. Allstate appointed a CRO who oversees both ERM and Six Sigma. Allstate believes that Six Sigma is an excellent set of tools to help reduce defects in processes and to help develop future leaders, thereby reducing the level of operational risk. Continue reading “The Scheme Chapter 6.1: Thoughts on the “Logic” Behind the Slabberator”