PREDICTIVE ANALYTICS FOR PERSONALIZATION IN POLICY MANAGEMENT

For insurance providers, one of the biggest operational challenges is connecting with clients and improving the customer experience. The emergence of predictive analytics helps providers optimize their use of big data to give their workflow a more personal touch, targeting clients’ individual needs more effectively and offering them the policies and claims management services needed to get the most out of their insurance.

According to Econsultancy, the effects of personalization are much broader than optimized policy management. Even simple things like getting a client’s gender wrong on paperwork can affect his or her experience and reduce overall satisfaction with service- something the provider wants to avoid at all costs.

“Send duplicate catalogs to a customer, get their gender wrong, or try to sell them lawn mowers when they live in an apartment, and you’ll soon compromise your marketing ROI,” Dominique Levin, an industry expert, told the news source.

The trick is to utilize all of the available information regarding a claim or policy and use it properly to maximize service quality during every interaction with that client. As data grows more sophisticated, firms will need to use a high-end business intelligence platform to continue improving and delivering the insights necessary to meet customer expectations.

Within the sphere of insurance analytics, the need doesn’t lie in customer service, however, it affects every area of operations. Underwriting, claims management software, even basic information management, can all be improved by deploying predictive analytics to streamline data usage and enhance the ability of employees to assess and report on trends. This will allow them to shift through data faster and ensure they are meeting customer needs on a personal level, while promoting overall growth throughout operations.

According to the Huffington Post, predictive analytics helps bring a personal touch to business intelligence because it helps produce more timely, actionable reports on information, ensuring that trends are acted on when they are still relevant, rather than missing an opportunity- or worse, a risk. This change is particularly advantageous in the health care professional liability field, where claims fraud and other risks continue to grow.

Beyond the general improvement that taking data usage personal with predictive analytics provides, the medical industry is advancing by leaps and bounds because of advanced business analytics solutions. These tools provide a framework, according to the news source, which aligns the evolving needs of healthcare staff with the capabilities of the insurance provider, minimizing risks and eliminating fraudulent claims in order to enhance the quality of service that firms are able to offer legitimate clients. This shifts the focus of insurer operations from risk management to risk prevention, allowing for more time spent on the claims and policies that need it.

Of course, providers will need to consider the data they are using as well. A high-quality predictive analytics strategy is nothing without the data to fuel it, and firms will need to ensure they are optimizing their data gathering and management solutions as well. This will ensure a more well-rounded approach to analytics practices and data-related operations as a whole.

The best thing an insurance provider can do to enhance its opportunities for growth, and minimize the risks that big data presents, is to invest in a business intelligence solution now and streamline its operations around providing higher-quality service to its clients moving forward. Such a change will support future demands and reduce the chances for loss as the insurance industry continues to evolve.

DON’T BE CONFUSED BY BIG DATA

The big data movement has caused quite a bit of confusion in its wake, but insurance providers need to overcome the misinformation and chaos by leveraging advanced business analytics solutions and focusing on the potential that new data can bring. While the big data trend has stunted business intelligence solution adoption in the past, it’s time for firms to start adopting in the tools that will deliver them from big data confusion.

According to Channelnomics, the business intelligence market is growing slow, but the potential for much bigger gains is there, waiting to be unleashed. Gartner’s study of the market found that the BI and analytics market grew by 8 percent in 2013, reaching $14.4 billion. However, the growth could be much stronger.

“Overall, just like (2012), the market is shifting gears, which is keeping growth in the single digits,” said Dan Sommer, the research director on the Gartner report. “Confusion still reigns around how to best leverage analytics on Big Data. Much Big Data investment happened outside traditional BI in experimental silos, infrastructure and services. No region in the world grew faster than 12 percent, which breaks the strategic assumption that many of the large vendors have held for years- that emerging markets are growing at a much faster rate.”

In order to start achieving bigger gains and avoiding the chaos that big data can bring, insurance providers can deploy more adaptive, flexible analytics strategies, which will allow them to harness larger data pools more effectively and streamline their insight processes. From underwriting to claims management software, predictive analytics solutions may provide the leverage that insurers need to turn this trend around.

“Paradoxically, we’re at the cusp of a series of tipping points which will facilitate unprecedented interest and adoption of analytics,” Sommer also noted. “As the market shifts gear, we saw a series of tipping points in 2014 that will accelerate adoption. These tipping points are that half of BI and analytics spending will be business driven, half of new license spending will be driven by data discovery requirements, and half of organizations will consider deploying BI in the cloud, at least tactically.”

By furthering business intelligence efforts, insurers will be able to better leverage big data and promote stronger underwriting processes- an area of operations proven to deliver results to firms that properly utilize it. With many companies reporting struggles with underwriting despite potential gains, optimizing these operations through predictive analytics software can be invaluable.

The right technology often helps businesses promote stronger data-related practices, and an advanced business intelligence platform is at the pinnacle of this potential. Rather than struggling, insurers need to invest in the right tools for the task at hand, be it improving policy management or advancing underwriting to enhance fraud detection efforts. Ultimately, these efforts will all help to achieve greater results across operations in order to improve a firm’s technological stance in the modern era.

OKLAHOMA EMPLOYERS GET OPTIONS FOR WORKERS’ COMPENSATION COVERAGE

The Oklahoma government passed a resolution in May, 2013, allowing employers to opt out of the state-run workers’ compensation system, selecting an alternative, private insurer for their needs. This strategy allows employers to shop around, and offers ample opportunities for insurance providers to ply their services and optimize their offerings to a broader range of clients.

“The Option is new to Oklahoma, but these products are not new to us. ECA has been offering alternative Workers’ Compensation programs in Texas for more than 20 years,” said Mary Ford, Divisional Senior Vice President at Great American Insurance Group- one of the providers taking advantage of the new opportunity. “Our team has years of experience specific to underwriting, claim administration and cost containment for these types of policies. We’re excited to bring our expertise to employers in Oklahoma so that they have additional options to gain more control over costs and claims while still providing for their employees’ well-being.”

With new plans being approved by the Oklahoma Department of Insurance, insurers need to ensure they are optimizing their services for businesses, and able to cope with the sudden increase in policy management and claims processes that will occur. This means deploying an optimized business intelligence solution that can handle growing data volumes, underwriting demands and more. Furthermore, providers should expect to see increased risk as the opportunity for fraudulent claims increases as well.

By investing in a predictive analytics solution before increasing its service offerings, insurers can minimize risks and promote stronger, more efficient service to clients. This helps to reduce the provider’s own loss risks while enhancing the overall quality of service that customer’s receive- simply by enhancing business analytics solutions.

The intended result of many new technology investments should be optimized workflow, but predictive analytics also helps to effectively reduce risk and increase fraud detection so that companies can enhance their processes around legitimate growth and the service that businesses and workers need. Enhanced workers’ compensation processes will streamline claims management and payouts to the injured, ensuring they get the care they need to re-enter the workforce and be productive again- shortening the cycle of injury and recovery and returning skilled workers to employment sooner. Ultimately, this could help to improve the overall economy while decreasing the stress injured professionals place on the health care system at the same time.

LIABILITY FOR CYBER THREATS RISING

With considerable changes coming in technology, especially data and cloud-related solutions for businesses, cyber professional liability insurance is a must for enterprises. However, few understand the need or value of these solutions, with a mere 5 percent of companies reporting they have coverage, according to Insurance Business America.

In fact, 39 percent of businesses believe cyber threats are covered under their commercial general liability policies, but this is a misconception caused by some specific overlaps between the two types of coverage. Too many firms think that their CGL coverage will protect them from liability from cyber attacks.

“This is certainly not the case, as a CGL policy has many gaps as it relates to cyber risk and was not written to cover cyber events,” Christine Marciano, president of Cyber Data-Risk Managers in New York, told the news source. “Several breaches within recent years have been battled out in court with insurers versus CGL policyholders.”

As many industries continue to be heavily affected by evolving technologies, particularly the cloud, the need to optimize their liability coverage increases. As such, insurers should consider improving their own strategies to increase awareness of the need for high-end coverage.

Beyond cyber liability coverage, general professional liability insurance will become critical moving forward, especially in healthcare-related fields. Medical centers will be utilizing data and expanding technology just as much as the next firm, and proper protection from cyber risks will be crucial for care providers.

The evolution of data storage and use will impact insurers just as much as it does the businesses they offer service to. By investing a high-quality business intelligence platform, firms will be able to leverage new solutions and increasing volumes of data more effectively for whatever purpose they need, whether it’s to increase claims management efficiency or broadening their client base through improved service awareness. The end result is the same in either instance- stronger data use through predictive analytics and other advanced tools.

Furthermore, the threats to operational integrity, for firms increasing their reliance on data and related technologies, are only going to continue. Nicolas Christin, a researcher with Carnegie Mellon, told the news source that, following the breach of security at Target, two dozen other attacks have been reported, but on a smaller scale.

“You’re going to see more and more people trying this,” Christin told The Washington Post “If you just saw your neighbor win the lottery, even if you weren’t interested in the lottery before, you may go out and buy a ticket.”

Ultimately, the deployment of higher-quality business analytics solutions will help insurers anticipate the types of risks presented by these scenarios, and optimize their coverage around them, while better protecting themselves from the inherent challenges of professional liability coverage. To this end, their clients will benefit from the improved service and the cost of coverage will even out, even as the threats remain at large.

MAJOR CHANGES COMING FOR RISK MANAGEMENT IN LIABILITY, WORKERS’ COMPENSATION INSURANCE

With the industry continuing to evolve, risk management in several areas of insurance is changing rapidly. Understanding the trends, where they are headed and what to expect will allow insurers to optimize their operations around the impact this evolution is having, while focusing on the specific areas of workflow that will see the largest changes. According to PropertyCasualty360, the most unusual alterations that firms should expect to see change their risk management and overall operations are pricing cycles and rates as they enter “unfamiliar territory.”

The ALIRT Insurance Research firm addressed this topic in its year-end report in 2013, specifically the lack of a soft-market cycle, despite surplus being at an all-time high, supported by solid underwriting, operating profitability and low catastrophe loss.

“Higher capital positions make achieving target ROIs more difficult. With the denominator going up, so must the numerator – and thus the plea for higher pricing,” the firm said, according to the news source.

“(There has been an) evolution of where the rate trends have been going (over the past few years),” explained Pamela Ferrandino, national casualty practice leader for Willis North America. “So probably three years ago we started to see some rate increases coming through, and then toward the end of (last) year, we started seeing the rate increases back off a little bit.”

Overall, these changes are affecting the numbers that firms use to determine rates, making them “deceiving,” with two different sets of information coming from groups of clients.

Liability trends split

Professional liability coverage demonstrates this two-group split very clearly, the news source reported. In 2013, median and average rate increases were around 5 percent, 2014’s numbers have fallen to barely 1.5 percent. However, the split occurs where 35 percent of the market is still reporting 3.5 percent rate increases, while another 35 to 40 percent isn’t reporting any rise in premiums.

“So the two distributions, which are completely separate, are creating an average rate increase of 1.5 percent,” Ferrandino told the source. “We’re literally seeing two separate curves.”

Workers’ compensation stabilizing

The split occurring in the workers’ compensation field is more geographically separated. While premiums are up nationally, some states are reporting a decline while many see a stabilizing effect in their rates.

“In June 2011 … I saw on average rate increases of about 2.5 percent for large national accounts,” Ferrandino reported. “When we look at what the trends were for June 2012, we saw average rate increases probably closer to 5.5 to 6 percent – close to 50 percent of clients were getting rate increases in that range. When we move to June 2013, we started seeing a little bit of a softening or shifting back. So some- about 30 percent of clients – were getting about a 2.5 percent rate increase and some clients- maybe about 35-40 percent – were getting a rate increase in that 5.5 to 6 percent range.”

This trend is further compounded in 2014, as early reports indicate that more than half of firms are getting the 2.5 percent rate again- indicating that the rate of increase is slowing again.

As rates fluctuate, providers have to be ready to adapt and overcome the demand this will put on their internal operations. Underwriting and policy management efforts will be heavily affected, requiring firms to boost the efficiency of these efforts, by investing in predictive analytics to enhance business intelligence operations for example. The right support will lend itself to stronger productivity to anticipate business-changing trends like rapid rate increases or drops, ensuring that insurers will be able to continue offering clients high-quality service regardless of where premiums go.

RECENT WORKERS’ COMPENSATION FRAUD HIGHLIGHTS NEED FOR STRONGER UNDERWRITING

The recent discovery of a New York police officer’s fraudulent claiming of workers’ compensation for depression following the Sept. 11, 2001, attacks has raised a cry for more stringent assessment of claims.

According to Insurance Business America, Officer Vincent Lamantia collected about $150,000 in disability payments before authorities discovered his claims of depression following 9/11 were falsified. Furthermore, it is reported that nearly 25 percent of similar claims are exaggerated, a significant loss potential for providers.

“There aren’t a lot fraudulent claims, but the ones that are can be huge,” said Ranney Pageler, Vice President of fraud investigations for EMPLOYERS. “A fraudulent claim is going to artificially drive up premiums and make it much more expensive, not only for the employer, but for the industry in general.”

In order to optimize fraud detection and minimize these risks, insurers need to be sure they are optimizing their business intelligence solution with predictive analytics and the right tools to enhance underwriting and the value of these processes. Such a move will strengthen claims management and speed up fraud identification to help eliminate these risks before they create loss.

LEVERAGING TODAY’S DATA FOR TOMORROW’S ANSWERS

Modern society expects immediate results, and for insurance providers this often means anticipating client demands because finding those answers takes time. In order to facilitate these efforts and ensure that service meets expectations, firms need to deploy predictive analytics to help them better capitalize on their data to answer the questions that will be asked tomorrow.

According to Merlin Knott, an industry expert, this dilemma is what is opening up new opportunities in business across the globe.

“Being part of a Google society, one that demands: ‘I want the answer now from an ever-present, yet invisible source,’ there is an expectation for quick access to information- this is no different for predictions. Users want to be able to use a simple graphical interface to ask a number of questions that lead to information that they can use,” said Knott, according to ITWeb. “Businesses can no longer focus solely on delivering the best product or service, why just meet customer demands when you can actually anticipate them? With the right technology tools, you can now identify new opportunities and provide targeted products and services to your customers to boost their efficiency and client retention.”

Today’s insurers can start using the massive data stores and new technologies available to them to anticipate client needs, and avoid these resources becoming hindrances due to unstructured data or simply from being unused. The trick is to simplify the user experience and develop the capability for actionable insights in real time. By effectively leveraging new business analytics solutions, firms will be able to gain a stronger understanding regarding what their clients need, want and are doing, while improving their ability to respond to that information.

The focus, according to Knott, is on quality- not quantity. The ability to decipher value from large amounts of data and utilize only that which will provide actionable insights is critical, which is why deploying a higher-quality business intelligence platform is key. The right approach will solidify a provider’s approach to underwriting, claims and risk management and a plethora of other operational processes.

By assessing the needs of their clients and investing in the solutions that help them anticipate and address them quickly- particularly high-risk claims- insurers are able to support larger volumes of claims and well as an increased complexity, while reducing overall risk of loss. By taking a proactive stance on data, rather than a reactionary one, insurers will develop a stronger foundation to launch future initiatives from as well.

“The resulting insight (from these efforts) allows businesses to uncover hidden customer, employee, vendor and partner trends, anticipate buying behavior and then take proactive action, and the implications are huge,” commented Knott, according to the news source.

Investing in the right business intelligence solution today will help a firm change the way it does business tomorrow for the better, and address the concerns of clients that haven’t even been voiced yet.

NEW TYPES OF PRACTICES SHAKING THINGS UP IN THE MEDICAL PROFESSIONAL LIABILITY WORLD

For professional liability insurers, the medical industry may not seem to change much, but on the other end, a storm is brewing that could shake the foundations of innovation. Insurance providers may need to broaden their audience pool and consider the offerings they have beyond the scope of traditional care centers in order to harness the growth that is occurring within the industry and start seeing some improvements within their own.

According to Insurance Business America, the health care industry is on an upward trend, despite the decrease in general practitioners, because of new interest among emerging businesses classes operating under the general umbrella of medicine. In fact, the U.S. Bureau of Labor Statistics has predicted growth in the industry, with nearly 2.3 million new jobs opening up between 2008 and 2018.

“A lot of agents that specialized in small practice doctors will need to find different ways of keeping their doors open,” Brad Rosgen, Healthcare Practice Leader at Brad & Wilcox, told the news source. “That means expanding to things they may not have worked on in the past, including home healthcare or outpatient services.”

Areas of the industry such as in-home care, hospice, anesthesiology and tele-medicine are expected to boom, while the traditional practices are closing their doors or shrinking in general.

“It’s not something a lot of people think to go after,” Rosgen noted, regarding hospice care. “It’s a fantastic business to write from a risk standpoint and carriers typically provide rates that are aggressive, but fair.”

In fact, many of these areas are so new for insurers that there is a lot of room for expansion. Loose underwriting guidelines increase the need for communication with clients, and require firms to provide significant “value-adding services,” according to the news source. This means focusing on the tools that will optimize service, and deliver high-quality policy options to firms. In order to accomplish this, insurers are going to have to look more closely at their own operations, and investing in a business intelligence platform that will support these changes.

“(Medical professional liability) is definitely an area of growth. Competitive as it is, it is still a high-growth industry and will continue to be, as the population grows,” Rosgen also said to the source. “If you’re not already, it’s definitely an area to get into if you want to keep pace with the general rate of the economy and have something new or fun to talk about every time you visit a client.”

Rather than running new services at high risk, insurers will need to deploy advanced business analytics solutions that will help them optimize workflow around these changes and deliver high-quality claims and policy management services at reduced risk to themselves. These improvements will provide the foundation for future growth and improve the chances of success for providers branching out into new territory, as both the professional liability insurance field, and healthcare, continue to evolve.

UNDERSTANDING INSURANCE MECHANICS FOR BETTER COVERAGE

For the insured, it isn’t just about having coverage, but ensuring that coverage meets professional liability needs. For insurers, optimizing service and offering the most effective and competitive rates is achieved by ensuring that clients understand what’s covered, what isn’t, and the general mechanics and requirements of contractual liability insurance.

PropertyCasualty360 focused on this very topic, offering a lengthy explanation of what is necessary for effective coverage in the professional liability field. The breakdown is, essentially, that recognizing the different factors that create liability, and the mechanics that alter a situation in a way that changes the effect of the coverage, is critical for proper insurance policies. For any business, there are several outcomes that can occur in a given risk situation. Understanding the full scope of the insurance policy and how it covers those situations will help clients minimize their own risk, translating to reduced losses to the provider in the end.

Ultimately, professional liability insurance is a critical area for growth and insurers will need to optimize their offerings with the proper use of data to ensure clear and concise communication with clients. Predictive analytics solutions can help optimize this area of operations and enhance the service being offered for further improvement.

SUPPLEMENTAL POLICIES JUST AS IMPORTANT AS PRIMARY

Apoll of professionals found that the majority want supplemental policies alongside traditional benefits in their employment. According to Lieberman Research Worldwide, which performed the poll, 53 percent of consumers look for jobs with supplemental insurance, while the index measuring confidence in voluntary benefits insurers rose 3.9 points to a record 102.9 in 2013.

“Businesses that add voluntary insurance to their benefits offerings can help their employees cope with out-of-pocket expenses due to an injury or illness while not incurring any additional cost to the company,” said Michael Zuna, Executive Vice President and Chief Marketing Officer with Aflac.

What’s more important however, is the link between offering supplemental insurance and reduced numbers of workers’ compensation claims. Tye Elliott, Vice President of core broker sales for Aflac, noted that 42 percent of firms that provide voluntary accident and disability insurance saw a decline in their workers’ compensation claims, supporting long-standing beliefs regarding this subject.

In order to ensure they are optimizing their offerings and providing the policies and service that businesses need, insurers need to invest in the latest solutions for optimizing their own operations. High-quality business analytics solutions will go a long way toward cementing this growth.