The U.S. based National Council on Compensation Insurance (NCCI) recently released its updated State of the Line statistics and, not surprisingly, reported that the workers� compensation industry in the US is experiencing the same type of pain that can be felt by insurers in Canada and elsewhere across the globe. Overall financial results are suffering severely due to rising claims costs.
Currently, there is only a 50% chance that an injured employee will return to work after a 12 week absence. This declines to about a 25% chance following a six-month absence, and is further reduced to a 1% chance after a one-year absence. It is therefore vital that claims professionals manage the claim from first notice to understand early what the injury situation is and make educated plans to work the claim through to earliest possible resolution.
Some proactive suggestions for combating rising claims costs in this difficult environment include:
- Adopt a disability prevention model.
- Address behavioral and circumstantial realities that create and prolong work disability.
- Acknowledge the powerful contribution that motivation makes to outcomes and make changes that improve incentive alignment.
- Invest in technology and infrastructure improvements.
The first line of defense lies in executing superior claims management practices, but technology can greatly impact claims costs. Some tools that will be necessary for the successful claims operation of the future include:
- Predictive modeling for fraud, large loss identification, recovery, and many other potential applications
- Analytics including the use of Business Intelligence (BI) tools to enhance data mining
- The use of business rules to ensure that best practices are adhered to and consistently applied
- Automated triage to get the claim into the hands of the right resources as soon as possible
Detailed information expanding on these tools and concepts was presented in a recent webinar by Sandy Blunt of Health Strategy Associates and Randall Day of FINEOS Corporation. The webinar recording can be accessed at www.FINEOS.com or on the event sponsor website, www.riskandinsurance.com/webinars.
About FINEOS Corporation
FINEOS is a global provider of innovative enterprise software solutions for insurance, bancassurance, and social insurance. FINEOS solutions address core business processing requirements including CRM sales & service, new business & underwriting, claims & payments, and policy administration. FINEOS solutions are built on a customer and case centric, rules-driven, component-based enterprise platform that serves as a flexible infrastructure for new product introduction, legacy enrichment, and business transformation initiatives. FINEOS is delivering documented benefits for some of the world�s leading insurance carriers, government institutions, bancassurers, retail banks and building societies. The company is headquartered in Dublin, Ireland and has offices in North America, Europe and Australasia. For more information, please visit www.FINEOS.com.