The value of accurate decisions in A&H claims

May 5, 2022

By Viktor Norlander

Woman with prostetic arm

In a fair and transparent accident & health claims settlement, the claimant receives equitable compensation. But ensuring correct compensation isn’t always easy. 

As insurers, you want to make accurate decisions and provide fair settlements where the claimant gets what their policy entitles to. If the decision is correct, well-motivated, and transparent – everyone’s a winner. But regarding personal injuries, it can be hard to find a fair settlement. For example, it can be tricky to figure out what kind of long-term disability an accident may have caused. The consequence of this can be compensation that is either too large or small and obviously, none of those options are desirable. 

Common problems with underpayment

To begin with, underpaying means letting your customers down when they are counting on you. It will lead to decreased customer satisfaction, lost customers, and possibly litigations that will cost time and money to process.

When KPMG reviewed Loss Adjustment Expenses (LAE) in claims management, they found that litigation is by far the most extensive insurance cost making up 55% of all LAE costs. To better understand and reduce litigation costs could mean enormous savings for insurers.

When you end up overpaying instead

Insurance companies often overpay to avoid underpayments and reduce the claims handling time. The claimant is satisfied, and the case can be quickly closed. But that isn’t very sustainable, right? 

A medium-sized insurance company paid out over 600M€ in A&H claims last year. A considerable amount of money and only a reduction by some percentage points will save the insurer millions. But what is the way forward?

A data-driven approach

For insurers invested in making more accurate decisions, the desired approach should be data-driven. With data and medical expertise, a decision support system will enable you to make more accurate decisions in less time. It will also generate documentation you as an insurer can send to the claimant to motivate the decision.

Mavera Decision Support System

Our cloud-based decision support system helps you make more accurate decisions and enhances the overall decision-making process. During a pilot evaluating Mavera DSS, one of our customers realized savings of 2% on their claims cost. 2% might not sound much, but for this customer, it meant an annual saving of several million euros. Contact us if you would like to see if you can see savings in your organization, as well.