I moderated a Special Interest Group of workers’ compensation insurers at this year’s Novarica Insurance Technology Research Council meeting. While our conversation covered a variety of topics, three key concepts dominated our discussion:
Core Systems Modernization
The conversation around legacy system conversions is moving away from cost and ROI; as technology advances, so do business and customer needs. Moving off legacy and modernizing core systems is no longer an optional activity—several participants reported it as a strategic requirement for supporting constantly evolving business needs, expanding business capabilities, and maintaining and growing their customer base. One participant emphasized the importance of having the right leadership drive this involved transformation project; only once insurers look beyond expenses and ROI calculations can they appreciate the true value of core system modernization—the ability to keep and grow their business.
Activity Around STP
STP, or straight-through processing, has not yet been implemented in a way that some insurers have idealized. One participant reported having “no touch” STP for medical only, which exclusively covers certain class codes and body parts. Multiple participants noted that STP remains a “low-touch” process, but efforts to achieve true “end-to-end automation” are consistent across the workers’ comp space.
Working with Data Scientists
While experienced data scientists are typically excellent at their roles, they are not always familiar with the particulars of insurers’ issues. This lack of familiarity with the hurdles carriers face occasionally leads to interpretations of data which may not be useful. In one use case, a data scientist developed a data model which concluded that people are more likely to be injured while riding their bikes in the daytime than at nighttime. Not a surprising conclusion, given that people are more likely to be out and about cycling during the day than at night!
For more on these topics, check out our Business and Technology Trends: Workers’ Compensation report, or contact us at [email protected] to learn more about our research and advisory work with workers’ comp carriers.
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