It's not easy being big. When Microsoft Corp. went looking for a risk management information system, there was nothing on the market that met its needs.The available systems assumed a company bought traditional insurance in one-year increments, and the software giant's approach was anything but traditional.

When Microsoft thinks about transferring risk, its main focus isn't traditional policies like property and casualty or general liability. Given the nature of its business, its limited physical plant and the fact that it doesn't operate any stores, the software giant is more concerned with risks related to intellectual property rights, regulatory matters and business contracts and relationships-areas where loss events occur infrequently, but can prove very painful financially. Microsoft employs sophisticated methods to transfer such risks, like captives and finite programs, and it tends to have high self-insured retentions. It also has multiple policies, with limits totaling hundreds of millions of dollars.

To streamline its management of claims information, it needed a system that would let it look at all its coverage, premium payments and how remaining limits might be decreased by claims that had not yet been processed or loss events for which claims had not yet been filed. When it couldn't find a system with those features, Microsoft had one built from scratch in just seven months by Infosys Technologies Ltd., a software company in Bangalore, India. Using Infosys allowed Microsoft to put in place "a pretty complex system at much lower cost than if we had done it in the U.S," says Brian Warren, senior claims manager at Microsoft.

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