Blog: Analytics has a critical role to play in major and complex loss


It is not just low-value claims that can benefit from technology – data analytics has an important role to play in major and complex loss, argues Neil Baldwin, McLarens executive director.

For some time now the loss adjusting industry has been shifting to an ever more digital model. Not only are loss adjusting businesses able to work effectively as a virtual office, on a global scale, but they have extended their digital capabilities to policyholders. The ability to assess and manage claims remotely, via drones, is well known and such capabilities have now extended to mobile devices.

For example, purpose-built mobile apps can allow them to stream real-time, geo-tagged and tamper resistant image evidence of damage to the policyholder’s property from anywhere in the world, by photo or audio-visual recording, directly to its system from where adjusters can start the claims process. 

Much of the discussion around technology in loss adjusting has been focused on the fact that, at the lower end of claim values, it can enable a greater proportion of claims to be managed on a desktop or automated basis.

Claims of a certain size, complexity or nuance, on the other hand, require a suitable expert to guide the claim through to settlement. Claims of this nature often have many stakeholders and physical interaction definitely enhances the team approach. Yet while that remains the case, technology has an increasingly important role to play in complex and major loss, particularly around data analytics. 

In certain circumstances, for example catastrophe or surge scenarios; corporate entities with multiple locations; and insurance schemes focused on specific industry sectors, data analytics is allowing loss adjusters to build a holistic visual and financial view of loss status across multiple locations.

Such tools help to better determine and benchmark loss exposure, improving the accuracy of reserving from day one of an instruction, and allowing analysis of financial data of all locations at a more detailed level. This enables comparisons to be drawn and broad sense checking to be undertaken.

Technological developments mean that adjusters can collate available policy, claim and financial data (which is often received from numerous sources in different medium) into one data source. They can then locate and research additional relevant factual data sources and overlay this to the core data source.

Through a coordinated team approach, consisting of adjusters, surveyors, accountants and data analysts it is then possible to produce a high-level dashboard and easy to use navigational functions to enable drill down analysis for each location. As well as reducing the need for certain site visits, this approach can also enable insurers to get on the front foot and advance claims settlements more efficiently.

In such scenarios – catastrophe, surge or losses across multiple locations – as site visits are completed and responses to requests for information on individual claims are received, adjusters can begin to negotiate settlements. From the initial batch of claims managed in this manner data sources become more robust. This enables data mining and claim modelling to help produce a fast track, alternate approach to the remainder of outstanding claims.

Allowing for certain considerations, such as agreed financial tolerance levels in the claim negotiation process, and ability to remove select claims through known outliers which are better handled in the traditional way, there are numerous benefits to this approach. From reductions in things like reporting, fee spend and time to settle, to greater visibility and control of a scheme’s performance, and even more effective post-event risk management, the customer experience is notably improved.

Within this approach, loss adjusters still have an important role to play. From soft skills such as negotiation and stakeholder management, to determining what is or isn’t covered in the framework of that policy, there is a compelling need for human intervention in the complex and major loss arena.  But the idea that tech is confined to lower value, high volume claims, is fast changing. 

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