Managing Extended Duration Claims

By Lynn Abood

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Opportunity for Improvement

If your 2017 plan calls for improved risk results and stronger customer service, consider the opportunity in the largest segment of LTD claims in your block.  Extended Duration, Permanent and Total, Stable and Mature….whatever the name, claims that have passed the any occupation test and have been identified for reduced handling represent between 75% and 90% of most insurer’s LTD claim blocks.  Herein is the opportunity to improve customer service while improving the financial performance of the LTD block.

First of all….it’s likely that 80% of the claims in the block are being managed at the appropriate level.

The 20%…

Just like the world does not stand still for those not living with a disability, changes are also possible for those who are – to name a few:

  • Medical advances or new treatments
  • Business opportunities where the barriers due to disability are not barriers at all
  • Changes in the disabled person’s motivation to explore something new

Segmentation through the use of industry expertise and predictive analytics can help to identify those situations where additional focus could change the direction of the claim.

Improved risk results:     tick                       Improved customer service:     tick

The 80%…

As noted, the majority of claims are managed appropriately.  Yet some of these claims still present an opportunity – for the insurer and for the claimant.  A voluntary settlement option for those claims where there is not significant excess mortality risk holds an opportunity for the company to mitigate financial risk AND an opportunity for the claimant to leverage a lump sum payment for investment, a change in lifestyle or location or some other purpose – not to mention eliminating their obligation to provide information to the insurance company.

Improved risk results:     tick                        Improved customer service:     tick

Most group disability claims organizations employ either one or both of these types of programs.  In fact, most carriers have either periodic or ongoing certification programs focused on certain segment criteria – generally claimant age and diagnosis.  Less consistency exists with voluntary settlements; many carriers use a settlement alternative as an accommodation without a formal plan or team in place.    

  • Having internal financial resources team up with experts in claim predictive analytics will combine industry insights with the dynamics of your claim block to help identify the claims to focus on – both for settlement and for risk management.
  • Partnering with industry experts to research and manage long duration risk and settlements will provide additional insights into your block and the capacity to manage the work. The combination of an objective view – no bias or investment in past practices – and specialist experience, will likely realize more opportunity than you might have thought possible.
The Winning Proposition

The combination of segmentation using predictive analytics and the expertise and capacity to manage claims identified through the process is a winning proposition.  Having supported this type of approach as the leader of a large claims organization and having seen components of this approach implemented with some of PDA’s clients I have experienced firsthand and seen through others the strength of this approach.  The return on an investment, from such a proposition, will help to strengthen your business more than you thought possible.

Improved risk results:     tick        Improved customer service:     tick

 

Lynn Abood can be contacted at labood@pdamaine.com

 

 

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