Claim Spotting

The term “predictive analytics” is relatively new, but the concept behind it is as old as insurance itself: using data that describe past results to predict future outcomes. Historically, only the largest insurers have had the resources to apply advanced predictive models to their actuarial, underwriting and claims processes. Today, however, insurers of all sizes are using highly accurate, high-return predictive analytics applications to foster profitable growth, lower loss ratios and reduce expenses.

Consider, for example, the value of predictive modeling in mitigating risk in workers’ compensation (WC) claims. Medical costs for WC claims are rising at an alarming rate, which gives insurers a strong incentive to identify as early and accurately as possible those claims with the highest potential for loss–and then manage them proactively.