The insurer says it improved the model, first developed in 2004, in order to identify the small percentage of workers’ compensation claims at risk to drive the majority of total claim costs. Features of Liberty Mutual’s next-generation predictive model include broader data capture, more sophisticated multivariate analysis, more frequent model runs and tools that enable claims professionals to take action sooner.
To build the model, the company evaluated more than 825,000 lost time claims and 140 million individual medical billing transactions. To validate the accuracy, the insurer ran more than 200,000 lost time claims through it.
“Today, our next generation predictive model works with significantly more data, enables more sophisticated multivariate analysis, incorporates Red and Yellow flags and supports better decision making,” notes George Neale, general manager for claims, Liberty Mutual’s Commercial Markets strategic business unit. “As early as claim intake, we now have the ability to identify claims with the potential to be high cost. In addition, we continuously assess the risk of escalation of our entire inventory through several modeling stages. Arming our claim handlers with this information gives us a unique opportunity to apply strategies and expert resources at a point in time where they maximize our ability to achieve the best possible outcome for injured workers and our policyholders.”
