Claims Adjusting

The claims adjusting function has become increasingly commoditized as Claim Departments add more and more boxes to check and processes to execute. It has become more important than ever to identify problem claims early and get specialists involved before major problems develop. To that end, many companies have added modeling tools to better manage claim costs and claim expenses.

Constraints on Modeling

The biggest constraint with modeling is the data going into the models. Specifically, models usually incorporate only structured data – date of loss, location of accident, number of parties involved, cause code, injury code, etc. Structured data is inherently constrained by the fact that it has been coded. Furthermore, codes are developed based on historical issues and business needs. The greatest value is solving the issues of today – and tomorrow.

Coding Diminishes Value of Data

The process of coding data results in a loss of critical knowledge because people consider a lot of information and are forced to choose a single (or few) code(s) to represent that information. For example, a claims professional reads data and listens to people provide various facts about an event. They then decide on a Cause of Loss code, Injury code, Contributing Factor code, etc. Thus, there is a tremendous loss of knowledge when a code is applied to data.

UDA Restores Lost Knowledge

Analyzing unstructured data restores the knowledge lost when codes are applied. All of the information available to the adjuster is available to be analyzed from which insights can be drawn looking across multiple claims. With this knowledge restored, there are numerous strategies and applications that can lower claim costs and claim expenses. UDA creates five oceans of opportunity rather than just the one ocean available with traditional structured data approaches.

Loss Costs and Claim Expenses

There are many applications that can have a great impact on loss costs and claim expenses. For simplicity, consider fraud as an example. Think about being able to identify claims in which the claimant is experiencing financial difficulty, the claimant’s story is changing, the claimant is claims savvy, the witness is lying, and/or the witness has also been a witness to three other claims. These and hundreds of other granular facts are often contained in the unstructured data. They provide critical insight into fraudulent claim activity.

WHAT Unstructured Data Do Claim Adjusters Get?

Claims adjusters for all lines of business also produce a lot of unstructured data. The greater the complexity of the claim, the greater the amount of unstructured data. More …

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