Predictive Modeling

1. Predictive Modeling An Overview of Analytics in Claims Management William J. Lentz, CPCU, ARe

2. What We Will Discuss What Is Predictive Modeling? Application of Analytics to Claims Management Who Is Using It? Considerations Predictive Modeling in Claims Management | Bill Lentz | August 2014

3. Predictive Modeling What Is Predictive Modeling? • Using past events to anticipate the future • The use of statistical analytical techniques to identify patterns among factors of past events • These patterns are used to develop models which predict the likelihood of future events or behaviors Predictive Modeling in Claims Management | Bill Lentz | August 2014

4. Database What Is Predictive Modeling? Data-mining Software Uncover Trends or Relationships Correlation Among Factors in the Data Updated Daily Predictive Modeling in Claims Management | Bill Lentz | August 2014

5. Use in Claims Management Application of Analytics to Claims Management Predictive models review historical claims data comparing factors associated with past losses against new and pending claims. Claimant Profile Treatment Venue Nature of Injury Representation Predictive Modeling in Claims Management | Bill Lentz | August 2014

6. Use in Claims Management Application of Analytics to Claims Management Potential Fraud Detection Subrogation Potential Reserve and Settlement Values Litigation Management Managing Outlier Claims Predictive Modeling in Claims Management | Bill Lentz | August 2014

7. Predictive Modeling Improved Decisions Improved Outcomes Strategic Goals More Efficient Claims Management Efficient Use of Clinical Resources Predictive Modeling in Claims Management | Bill Lentz | August 2014

8. Who Is Using It? Who Is Using It? Large Carriers Corporate Risk Management Middle-size Carriers Small Carriers Predictive Modeling in Claims Management | Bill Lentz | August 2014

9. 5 Stages of Design and Implementation Considerations Project Design and Planning Data Analysis, Cleansing, and Staging Building, Testing, and Validation Integration of the Model Modeling Monitoring and Management Predictive Modeling in Claims Management | Bill Lentz | August 2014

10. Considerations Considerations Data Culture Data Integrity is Essential Resistance to Use of Modeling Sources and Quality Proper Use of Modeling Predictive Modeling in Claims Management | Bill Lentz | August 2014

11. Myths Considerations Predictive Modeling is a way to automate decisions Predictive Modeling allows carriers to do more with less people Predictive Modeling in Claims Management | Bill Lentz | August 2014

12. Considerations Considerations • Predictive Modeling can enhance good claim handling – it cannot rectify poor claim handling • Not a substitute for proper claim management methods • Does not take the place of individual claim analysis • Supplement and support decision making process Predictive Modeling in Claims Management | Bill Lentz | August 2014

13. Predictive Modeling FinalThoughts Analytics Can Be an Effective Tool Future Technological Advances Investment Required Predictive Modeling in Claims Management | Bill Lentz | August 2014

14. Thank you William J. Lentz, CPCU, ARe +1 212 341 8087 wlentz@genre.com