It’s Just So Predictable

Predictive analytics have been used in a variety of industries for a number of years. Perhaps nowhere is the concept of predicting and rating risks more common than in the insurance industry. From zip codes and income to credit scores and driving records, a whole host of data points can be used to accurately gauge risks, identify trends, and set rates. 

Certainly there are those who have taken exception to some methodologies, as not all people with bad credit are bad drivers, nor are all people living in lower socio-economic zip codes going to be in an accident or have their vehicles stolen. But this overly simplistic view misses the point: risk is rated upon probabilities, borne out by statistically validated historical facts.

The bigger question should be the ability of insurers to leverage predictive analytics to guide other aspects of their businesses, such as the claims process. The capture of data provides a wealth of opportunities, such as the identification of medical fraud, staged accidents, injury buildup, repair-cost variations, towing, rental, and storage. When properly instituted, the use of this information benefits both the company and the consumer immeasurably. 

From the outset of a claim, data that is captured, reviewed, and monitored can isolate gaps in the end-to-end process that are impeding productivity, quality, and accuracy. This historical data can isolate claim handlers who are not asking the right questions, properly appraising claims, overlooking fraud indicators, or missing subrogation opportunities. Much like a football coach reviewing game-day film, this type of analysis of processes, workflows, and results can be utilized to improve future outcomes. 

In Re-Adjusted: 20 Essential Rules for Taking Your Claims Organization from Ordinary to Extraordinary, I discuss in greater detail real-life experiences of utilizing analytics to dramatically improve subrogation results. When considering this aspect of claims, recognize that there are a variety of critical functions that impact outcomes.

Read More of Chris Tidball’s Blog Posts at Blocking & Tackling

For response-side subrogation, carriers often utilize liability adjusters to assess those claims. As was the case during my tenure running claims operations, these types of inbound demands often had a low priority, resulting in missed opportunities relating to liability, estimatics, and historic alternative parts utilization

On the demand side, there are similar challenges of ensuring that the right files are referred, that proper procedures are in place to minimize closures with no recovery, and that all files with potential comparative negligence are identified during the claims process.

As is the case in many aspects of claims, data analytics can be a powerful tool to identify missed opportunities on both demand- and response-side subrogation. When factoring in perceived costs, consider that, industry wide 15 percent of all claims are closed by adjusters with a missed subrogation opportunity. Calculate what even a small percentage of this would do to your bottom line. 

By developing key metrics, you can utilize data to identify historical trends that will predicate future behavior. With the right set of data, it is possible to not only gauge what is being done internally, but also amongst the competition, creating an instant competitive advantage.

Whatever your opportunity—be it subrogation, salvage, fraud identification, inspections, or a myriad of other claims-related processes, consider the benefits of leveraging data for bottom line improvement.

About the Author
Christopher Tidball

Christopher Tidball

Execution is paramount to the successful claims organization. In his weekly blog Blocking & Tackling, Chris Tidball combines his 20 years of claims management and coaching experience to lay out the X’s and O’s of the ideal claims process.

Tidball is a claims consultant and the author of Re:Adjusted: 20 Essential Rules To Take Your Claims Organization From Ordinary To Extraordinary. His career has spanned more than 20 years for multiple top 10 P&C carriers in roles ranging from claims adjusting and management to quality assurance and leadership. He can be reached at,


Resource Center

View All »

Complimentary Case Study: Helping achieve your financial goals By:...

Find out how a Special Investigation Unit used TLOxp to save the company money and...

Do Your Clients Hold The Right CDL License?

Learn about the various classes of CDL Licenses and the industries that are impacted by...

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Tech Digest eNewsletter

Technology related insights for insurance professionals including key developments, solution providers and news briefs from the carrier front – FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.