April 2017 – Managing Extended Duration Claims

In our last newsletter, we described how Extended Duration Claims follow the 80-20 rule; 80% of the claim reserves are stable with predictable results, and the other 20% of reserves are where opportunity lies.

The problem is finding a way to identify the 20%. If you have a large number of claims in this category, it can be a herculean effort to identify where there may be some opportunity for resolution.

Typically this brings to mind analogies of ‘needles in hay-stacks’ with many claims operations experiencing:
– High case loads
– Staff with limited expertise
– Diminishing returns on time invested
– Lack of support from technology

This is where we have found that predictive modeling tools can help, by using automated techniques to sift through the claims information to identify claims which are likely to be in that 20%.

This means that when your claim managers start working on a claim that has been selected by the analytics tool, there is a very high chance of a resolution, enabling your claim managers to focus time and effort productively.

Our predictive models and analytical algorithms can move through your data to spot patterns that indicate that the claimant’s situation has changed, or they have adapted to their disability and are ready to try something new, or they may be a good target for a settlement. Either way we can help identify that 20% without the need for a costly and labor intensive project.

These are some of the key factors that should be considered when approaching a project focused specifically on Extended Duration Claims. Consider the following questions:

  1. What level of RTWs do you see after 24 months duration?
  2. Do you actively pursue settlements with your Extended Duration Claims?
  3. What is the level of priority that the organization attaches to the resolution of these claims?
  4. Are you offered support from the technology group to assist with this review?
  5. Do you have a method to prevent the future accumulation of Extended Duration Claims?
  6. How much interest would you have in a new strategy to specifically address these claims?

This is a new approach to an old problem, which to a greater or lesser extent, every insurer has issues with. The returns from the resolution of these long term claims can be eye-watering in size, and we have a ‘smarter mouse trap’ to help!

For more details please contact the claim lab at info@claimlab.org

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