While almost every insurer has implemented a claims system and still others have more than one, most have not taken advantage of the wealth of claims data collected. This byproduct of the claims process is a goldmine of insight into the operation. When effectively put to use via business intelligence (BI) tools, the secrets buried deep in the data can help transform claims managers into knowledge managers.

A recent analyst report noted that 70 percent of insurer revenue is spent on claims, with about 20 percent spent to manage the claims process. Add in that claims handling is a major contributor to customer satisfaction and it is no wonder that insurers are continually looking for technologies to help. Modern claims administration systems have enhanced the process and enabled greater efficiencies, but BI can take the operation to the next level – beyond automation that modern claims systems offer to better decisions for improved claims outcomes.

At the heart of any analytical tool, whether as simple as spreadsheets or as sophisticated as BI, predictive modeling (or predictive analytics) is data. Combining good data and data management with BI offers insurers better access to and analysis of claims data to monitor key performance indicators (KPIs). An increased ability to evaluate claims performance leads to proactive versus reactive  claims management, identification of claims trends, and avoidance of future bad risk, business benefits beyond reducing case-by-case claim costs  or settling a claim faster.