Most P&C insurers across the country are at various stages of upgrading their core claims management systems. A fortunate few have already completed the journey of an information technology (IT) transformation.

From automated workflows and straight-through processing, to strategic allocation of claims resources, these 21st century claims management systems are helping companies gain a competitive edge through the use of modern technology, enhanced key performance indicators, and key performance predictors. However, for many insurance companies, the claims IT transformation journey is just beginning. Numerous challenges can exist, such as gaining C-suite support for the significant investment, unraveling complicated legacy systems, competing IT resource priorities, the complexity of researching/selecting a processing system vendor, and determining how to connect with the cloud computing evolution.     

At the same time, it is important to note that a number of commercial and personal insurers have effectively leveraged predictive modeling on the underwriting side of the house to enhance their pricing and risk segmentation. For claims, however, a smaller percentage of insurers have been able to leverage predictive modeling to enhance their ability to identify the required claim for triage, the required resource for assignment, and the required time for targeted intervention (at first notice of loss). To the extent that, claims organizations have the "hood" of the claims IT car open. It is vital for them to begin considering how advanced analytics can eventually play an important role in the claims processing system transformation. This article discusses how insurance companies can bring predictive analytics along for the ride. Business Problem-Solving: Building for the Future
Insurers can start the journey by thinking about the business problems the organization would like to solve today, in three years, and possibly five to 10 years down the road. Although an organization may not be ready to implement a claim predictive modeling solution immediately, it is important to consider the impact that advanced analytics could have on the claims organization and the claims handling process in the future. As analytical capabilities grow and continue to be adopted, market forces and competition will likely make predictive modeling table stakes on the claims side.