Kennedys’ IQ product manager says analysing claims months down the line is ‘not acceptable’
Technology could create a shift towards analysing claims decisions ”in the moment” instead of later reviews down the line, according to Kennedys IQ product manager Joe Cunningham.
Cunningham said the industry could soon reach a point where regulators force insurers to adopt technology that goes beyond claim sampling.
Claims sampling is a process whereby a representative subset of insurance claims are selected for auditing and review.
Cunningham said analysis of claims carried out months after they closed was “not acceptable”.
Speaking during a webinar hosted by law firm Kennedys last week (16 March 2023), he said: “Insurers are required to have systems processes and controls in place and they are there – in part at least – to promote consistency in judgments.
“Arguably, where the traditional analysis of this is by claims audit, [and] that being undertaken post the event or post the claim being closed a number of months later, for example, in 2023 as we move forward, I don’t think that really is acceptable.
“Technology is getting us to the point where we can analyse judgments in claims, perhaps in the moment.
“I wonder how long it will take us to get to the point as an industry where regulators are mandating that insurers have systems and processes in place and, as part of that, the adoption of technology to move forward and beyond just claim sampling.”
’Quite difficult’
Cunningham also highlighted that, while the learning and development from the way a claim is handled is important, lessons can be challenging to implement with current models.
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This is because decisions made around claims revisited months after they closed could be forgotten.
“We are always looking for where the learning and development opportunities are, [but] they’re really difficult to implement six months after someone has forgotten why they made that particular decision or what affected them on that day,” he said.
“You’re always trying to challenge the notion of claims adjusters becoming entrenched in a claim – [this is] when they’ve taken an experience, for example, previous to handling that claim, which has focused their minds on one particular element and they become entrenched.
“So, learning and development is also quite difficult with our current models.”
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