Predictive Modeling for Workers Compensation

Predictive modeling can deliver highly significant savings in the claims management process:

• Identify high impact claims from an early stage
  • Know from the outset which claims could lead to high medical costs
  • Take preventive action from the start of the process
• Claim scoring for likelihood of return to work
  • Predict the likely outcome of a claim
  • Provide the best return to work plan for each claim

Identification of High Impact Claims

The view is now widely accepted that early intervention can prevent a prolonged period of disability and an escalation of medical cost. Predictive modeling can be used to identify claims which might lead to a high level of medical expenditure and enable preventative measures to be employed.

Predictive models can identify the profile of a new claim and enable claims managers to apply resources earlier in the process to prevent the cost escalation.

“Predictive modeling is a science
… but it is also an art.” It is often not as simple as suggesting that a certain injury requires a certain treatment. Complexity comes often from underlying conditions, or sociological factors.

Predictive models are very well suited to handling these complex interactions and projecting accurate outcomes. Claim Analytics technology is particularly strong in its ability to project likely claim medical costs.

Claim Scoring for Likelihood of Return to Work

Predictive modeling can also used to identify likelihood of return to work given certain conditions or injuries. Claim scoring provides a

numeric measurement – a 1 to 10 score – of the likelihood of a worker compensation claimant’s return to work within a specified timeframe. The higher the score, the greater the likelihood of return to work.

This accurate, objective measurement:

• Facilitates early intervention
• Enables claim experts to manage expected medical costs
• Realizes significant financial benefits.

How accurate is a Claim Analytics model?

The validation test above, taken on a real life dataset, maps actual return to work against predictive scores.

The Result?

Scores are highly accurate in predicting return to work across all levels of workers compensation claims, including the difficult-to-differentiate middle range.

Claim Analytics

Claims Analytics is a well established company with a number of major insurers on our client list. We are now the leaders in providing predictive modeling technology to the insurance industry. The company is led by two actuaries with a passion for building ever more accurate predictive models.

Ask us to help you identify and quantify areas where you can capitalize from the use of predictive modeling to better manage your workers compensation claims.