The Impact

of More Data

At First Notice of Loss and Throughout the Claims Handling Process

P&C carriers have incorporated data and analytics into their application and underwriting processes, but few have integrated data deeply into their claims process. To assess the effect of having more data earlier in the claims process, LexisNexis Risk Solutions conducted a study that included the A.M. Best top 20 ranked carriers.

In the study, 10 million claim features were divided into two categories, based on the availability of certain data elements immediately after completing the claims reporting process and before assignment:

LESS DATA

LESS DATA had either:

a telephone number and only one other data element* or
no telephone number but all other elements (as shown)

MORE DATA

MORE DATA

a telephone number and two or more other data elements*

MORE DATA included:

LESS DATA had either:

a telephone number and only one other data element* or
no telephone number but all other elements (as shown)

MORE DATA included:

a telephone number and two or more other data elements*

Results showed that more data ― earlier ― had considerable benefits to claims’ outcomes

*Other data elements: name, address or license plate

IMPACT ON THIRD-PARTY CLAIMS

A comparison of the bodily injury settlements between Less Data and More Data groups showed fascinating results.
 

BODILY INJURY CLAIMS »

BODILY INJURY CLAIMS

TRUE OR FALSE

More data reduced average cycle times by two weeks and overall claims cost by thousands

TRUE

TRUE

FALSE

FALSE

Incorrect!

This is true, more data did reduce average cycle times by two weeks and overall claims cost by thousands.

111 days
100 days

5–15%

lower average cycle time

25-49%

less in attorney involvement

47%

less in expenses, on average

Correct!

This is true, more data did reduce average cycle times by two weeks and overall claims cost by thousands.

111 days
100 days

5–15%

lower average cycle time

25-49%

less in attorney involvement

47%

less in expenses, on average

PROPERTY DAMAGE CLAIMS »

PROPERTY DAMAGE CLAIMS

TRUE OR FALSE

More data lowered average cycle times and average claims cost by 15%

TRUE

TRUE

FALSE

FALSE

Incorrect!

This is true, more data lowered average cycle times and average claims cost by 15%.

41 days
35 days

8–15%

lower average cycle time

Correct!

This is true, more data lowered average cycle times and average claims cost by 15%.

41 days
35 days

8–15%

lower average cycle time

CASE STUDY

The ROI for Smart Claim Insurance Co.

Note: The case study illustrated here is a hypothetical example based on the records available to LexisNexis Risk Solutions.


A carrier’s results may vary based on loss or settlement state, business model and other factors. LexisNexis Risk Solutions can complete an ROI analysis to help customers determine how incorporating more data into their claims processing can help them reduce costs.

Property damage

Repeated order processing

Annual cost savings

Return on investment

Property damage

Smart Claim Insurance Co. found that incorporating more data allowed adjusters to close claims faster—reducing claims losses by nearly $1.5 million on stored (non-repairable) units, and more than $2.2 million on repairable units. When the carrier included the cost associated with staff time, the total savings on physical property claims was just short of $4.5 million.

Property damage

Repeated order processing

Annual cost savings

Return on investment

Repeated order processing

Next, Smart Claim Insurance Co. determined that 45 percent of its claims required adjusters to complete multiple data searches in order to develop all needed information. The new solution reduced the need for multiple searches on 70 percent of those claims. Considering the time that adjusters used to spend ordering reports, the carrier estimated the cost savings at just over $120,000.

Property damage

Repeated order processing

Annual cost savings

Return on investment

Annual cost savings

Finally, Smart Claim Insurance Co. realized that because it had already incorporated big data into its claims process, it now ordered 85 percent fewer additional data reports than before—saving approximately $223,000. Adding the cost savings together, Smart Claim Insurance Co. saved more than $5.5 million that year.

Property damage

Repeated order processing

Annual cost savings

Return on investment

Return on investment

Smart Claim Insurance Co. handles 146,000 claims per year, and 90 percent of them were bolstered by its claims data solution.

 

Reviewing all the results, Smart Claim Insurance Co. realized that the claims data solution had not only paid for itself—but it had also saved the company nearly $6 million dollars that year, for a return on investment of approximately 2.8 to 1.

ADDITIONAL ADVANTAGES

TO MORE DATA

Real-time data and analytics for claims offer even more benefits, particularly at first notice of loss (FNOL)

Improve efficiency

Find out more »

Improve efficiency

Claims go to the right person at the right time.

 

Claims adjusters and investigators no longer have to chase down information or touch files multiple times.

Reduce losses

Find out more »

Reduce losses

P&C carriers can close claims faster and reduce excessive losses, including those from lower vehicle storage and rental costs for material damage claims.

 
Carriers can also build rapport with claimants earlier to reduce likelihood of attorney involvement.

Satisfy more customers

Find out more »

Satisfy more customers

Unsatisfied customers are more likely to switch providers, so it’s imperative to deliver exceptional customer service.


Prompt contact, effective investigation and timely, fair claims resolution are expected.

More Data, Earlier: The Value of Incorporating Data and Analytics in Claims Handling

Access this white paper and learn how integrating third-party data and analytics into the claims lifecycle can help you achieve competitive differentiation and increase profitability—through greater efficiency, reduced costs and increased customer satisfaction.

ABOUT

LexisNexis® Risk Solutions

LexisNexis Risk Solutions is a leader in providing essential information to help customers across industry and government assess, predict and manage risk.

At LexisNexis Risk Solutions, we believe in the power of data and advanced analytics for better risk management. With over 40 years of expertise, we are the trusted data analytics provider for organizations seeking actionable insights to manage risks and improve results while upholding the highest standards for security and privacy. Headquartered in metro Atlanta USA, LexisNexis Risk Solutions serves customers in more than 100 countries and is part of RELX Group, a global provider of information and analytics for professional and business customers across industries.
Our insurance solutions assist insurers with automating and improving the performance of critical workflow processes to reduce expenses, improve service and position customers for growth.