Q&A: The State of Analytics in Claims

Everyone knows analytics is hot in insurance, but are all business units using it equally? Grant Little, director of claims technology and analytics for National General insurance says that his department is making strides, but overall analytics are underused in claims.

Insurance & Technology: How would you describe adoption of analytics in claims departments relative to other insurance practice areas?

Grant Little: Claims departments in general are probably two decades behind all the analytics that have been done in pricing and underwriting. They've been doing sophisticated modeling for three to four decades, while claims only started to put its toe in the water in the 1990s. It's only really being adopted in fraud detection and subrogation.

I&T: Where do you see the growth opportunity for analytics within claims departments?

GL: Triage, to fast-track certain claims. It's in enabling the self-service aspect -- trying to figure out how to get customers to move forward without too many touches from us. Where analytics comes in is figuring out what are those types of claims that are optimal to run through that channel.

I&T: So even in claims, analytics-enabled customer experience is top-of-mind?

GL: Yes. People now feel that if they can schedule their own appointment with a shop, it's great for them -- after all, they check themselves out in grocery stores. But you can only do that on certain types of claims. If it's a customer who's been with us for 10 years and backed into a mailbox, they may not need to talk to anybody. If they are going to report that they were T-boned, that's different. Identifying that on the front end is very important.

I&T: What kinds of technology enable that?

GL: We've got a partner called Snapsheet where customers can take a picture of their claim event. The customers that go through that experience give it really high marks. While it generally goes very well, sometimes we misidentified whether or not the customer has a smartphone, so they can't actually do what we're asking them to do and have to talk to a different representative. We are also in the process of looking at other partners like Lexis-Nexis that has a lot of public records information, so on the first point of contact, we can have some additional information and understand what kind of track this claim should go down.

I&T: What other challenges does claims analytics face?

GL: Claims has a lot of data, but sometimes you're coming off of three or four different systems, all of them have some overlap but other times you're comparing a circle with a square. Figuring out how to assimilate all that data together is a challenge -- there's been so much acquisition and so much quick data integration where the actual understanding of the data was an afterthought. Now it's about making this operational. We do a lot of post-mortem analysis where our processes break down. To the extent that we can do that effectively, it really gives us a competitive advantage.

Hear Little and other analytics experts speak at the Insurance Analytics USA conference in Chicago March 19 & 20. I&T senior editor Nathan Golia also will moderate a discussion at the event.

Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio