In the insurance industry, we have no shortage of data. In fact, most providers have the opposite problem: we have so much data, we don’t know what to do with it. Providers of workers compensation and other lines have long recognized the value of data, and are more recently identifying practical opportunities to use it.
“You can have data without information, but you cannot have information without data.”
—Daniel Keys Moran, American programmer and science fiction writer
A recent survey conducted by Willis Towers Watson illustrated the impact data analytics is making in the insurance industry. Many of the data use trends outlined in the report are also making waves in the work comp space, as providers seek to use data to improve service, claims management and policyholder safety.
1. Analytics Enable Faster Quotes
The study revealed that 67 percent of respondents use or plan to use data to enable faster service. As automation becomes a bigger part of everyday life, faster service is a top priority for work comp providers. Last year, Missouri Employers Mutual partnered with Valen Analytics, a leading data and predictive modeling provider, to build a custom model that empowers underwriters to make quicker and more informed decisions on risk selection and pricing. By increasing the use of data, MEM can increase straight through processing for certain policies and improve quote turnaround time for customers.
2. Auto Telematics Improves Driving Safety
Telematics data was another hot topic in this report. Fifty-seven percent of the survey’s respondents plan to use telematics for applications ranging from underwriting and pricing to changing customer behavior. In work comp, telematics is particularly useful for companies in the transportation industry, or any organization with large vehicle fleets. Although motor vehicle accidents are not the most common cause of workplace injury, they lead to the most severe injuries and are the leading cause of work-related fatalities.
Last year, the American Association of State Compensation Insurance Funds (AASCIF) announced its partnership with Cartasite, a fleet telematics company. Through the partnership, Cartasite offers special pricing for any AASCIF organization’s policyholders. Cartasite uses auto telematics to help policyholders collect driving behavior data, like excessive speed and sudden breaking, to decrease the number of motor vehicle accident injuries and fatalities.
3. Claim Triage Impacts Medical Costs and Return to Work
In the work comp industry, one of the most compelling applications of data analytics is in claim triage. In the next two years, 80 percent of survey respondents plan to use data to get an overview of incoming claims and quickly identify the highest priorities. At MEM, 57 percent of claim costs are medical, so establishing the severity of a workplace injury as quickly as possible is crucial. By identifying a potentially high-risk claim early, providers can help control the costs and recovery time. Controlling medical costs benefits both the provider and the policyholder by limiting the impact a serious claim has on the policyholder’s e-mod and, therefore, future premium rates. We also know that speeding up recovery and returning to work sooner benefit an injured worker in many ways, like retaining full earning capacity, staying on a regular schedule, and having a sense of security, stability and independence.
Most Providers Face Adoption and Understanding Challenges
Although using analytics in insurance can significantly improve efficacy and efficiency, 83 percent of the survey’s respondents say that outside of analytics teams, the understanding of data analytics within organizations is limited. Like these providers, MEM faced the challenge of internal understanding and use of advanced data analytics. In 2015, we implemented Domo, a business analytics platform that organizes and presents data in ways that are accessible to every member of an organization. It provides not only high-level data visualizations, but also drill path scenarios to enhance business analysis, so even non-data-experts can follow the most important business metrics and trends.
“Having useful data is important,” remarked Roger Walleck, Vice President of Underwriting at MEM. “Being able to visualize that data and quickly identify anomalies and address them is critical to our business. Domo gives us that functionality and provides a ‘common language’ that cross-functional groups can understand quickly.”
Earlier this year, an MEM team was selected to present at Domopalooza, a conference attended by more than 3,000 Domo users, vendors and fans. Mitchell Ritter, Director of Corporate Research, and Monica Salmons, Corporate Underwriting Analyst, shared MEM’s story about implementing Domo and engaging employees to make data-driven business decisions.
With the implementation of enhanced data analytics, work comp providers can equip their policyholders with the right resources to achieve workplace safety while also improving efficiency and solving workplace challenges. At MEM, every business decision we make traces back to our goal of eliminating workplace injuries. By enabling everyone to use the data that is available, we can work together even better toward our vision of safe, healthy and injury-free workplaces.