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Achieving Claims Excellence: Predictive Analytics

author by Paul Jones time May 20, 2021

As explained in our last blog, specialty insurance companies today are competing in a difficult market environment against the backdrop of an uncertain economic outlook. Insurance carriers that upgrade their operational capabilities will not only increase efficiency and reduce costs; they will also improve the experience of their customers.

By achieving operational claims excellence, Managing Agents can obtain a competitive advantage that fosters long-term, profitable growth and increased returns.

In the specialty insurance class, it is low volume events that often result in a large claim so it is critical for Managing Agents to identify which claims are likely to prove most complex. As DOCOsoft has outlined in previous blogs, predictive modelling can help provide this insight by applying data mining techniques and statistical algorithms to effectively forecast outcomes for individual claimants.

These analytical tools, which DOCOsoft now offers, analyse and detect patterns that had formerly gone undetected, providing insurers the insight to improve the claims management process from assignment to resolution. For insurance companies and Syndicates, predictive modelling can lead to efficiency gains and significant cost savings.

Insurance carriers are deploying predictive modelling applications in pricing and underwriting, particularly when it comes to Cat events and even in areas such as aviation, marine, and energy. However, developing similar applications for claims is also beginning to gain traction in the insurance sector. Claims predictive models are now being applied successfully to multiple lines of business, including workers' compensation, personal and commercial auto bodily injury, and general liability bodily injury.

Demand for predictive claims analytics is growing. Its use will become even more powerful going forward as data quality improves and the quantity of internally and externally captured data grows. To be 100 per cent effective, however, the user case for predictive models will need to be driven by forward thinking Heads of Claims looking to embed such technology into their organisation’s claims culture.

Weaving analytics into the organisational fabric can position Managing Agents for strategic, competitive and cost advantages.

At the moment, as a Market, we have barely scratched the surface of what new information can be analysed by claims management systems but we will have a detailed view and complete picture thanks to more granular claims workflow triggers with all the data analytics opportunities that entails. 

Sophisticated artificial intelligence (AI) and big data will underpin future insurance solutions such as when and how to proactively manage the customer claims experience or how to enhance retention of the most profitable customers, for example. Risk carriers that are able to make effective use of big data and advanced A.I. could develop substantial competitive advantages.

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