better claims outcomes - actuaries
TRANSCRIPT
Better Claims Outcomes
What behavioural science
offers
Basem Morris
Kranthi Ram Nekkalapu
Pulse Check• How many of you work in the field of
analytics and data science?
Pulse Check• How many of you have used
behavioural science in your work?
Contents
• Advanced Analytics
• Behavioural Science
• The Intersection of Analytics and Behavioural
Science
• A Case Study
• Applications in Claims Outcomes
ADVANCED ANALYTICS
Types of AnalyticsAdvanced Analytics (Predictive & Prescriptive Analytics) is the use of modern
data mining, pattern matching, optimization, and predictive modeling tools
for complex event processing/analysis to produce subtle relationships and
algorithms that help businesses make better decisions through prediction and
foresight
Detective Analytics & Business Intelligence is an umbrella term that describes
the methodologies, metrics, processes and detective analytical applications
used to monitor and manage the business performance, financials, risk and
operations
Diagnostic Analytics and Visualization is querying, reporting, online analytical
reporting (“OLAP”), and alerts that help to identify ‘what happened‘ or
'where is the problem‘ and determine how to act
Detective Analytics &
Business Intelligence
Diagnostic Analytics
& Visualization
Descriptive Analytics, Operational & KPI Reporting
Descriptive Analytics, Operational & KPI Reporting is standard reporting, Ad-
hoc reporting, interactive dashboards to describe business performance,
markets, financials, risk and operations
Advanced
Analytics
Claims Analytics
Treatment Management
Close
Claims manager
performance
Case estimation
Escalation?Investigate/
Evaluate
PaymentsRecoveries
Risk Management
Fraud Investigation
Litigation Management
Claim TriageNotificationRTW
Management
1
2 4 5 6
3 7 8
1Deploy appropriate resources to manage claim given
complexity score at FNOL
2 Detect common causes or patterns of injury
3 Case estimation based on claims severity models
4Predict likelihood of fraud and refer claims above a certain
threshold to the investigations unit
5 Predict the litigation strategy with the highest chance of
success
6 Focus early intervention efforts on high severity claims
7Identify claims managers who are best suited to manage a
particular type of claim
8Use concepts of behavioural science to create effective RTW
strategies
BEHAVIOURAL SCIENCE
Nudge Theory“Nudge theory argues that positive reinforcement and indirect
suggestions can be more effective than direct instruction, legislation
and enforcement.”
Nudge Theory
Nudge Theory
Nudge to reduce spillage in urinals
The Convergence of Nudges and Advanced
Analytics
The £190m Sentence
“9 out of 10 people in <your town here> pay their tax on time.”
Behavioural Nudges and Predictive Analytics
When the ultimate goal is behaviour change, predictive
analytics and the science of behavioural nudges can serve as
two parts of a greater, more effective whole.
Predictive
Analytics
Behavioural
Nudges
Behavioural
Change
A Case Study
Nudging New Mexico
The Results
2X more likely to report new earnings
1/2 as likely to commit fraud
20% more likely to find work
APPLICATIONS IN CLAIMS
OUTCOMES
Nudging Injured Workers
• Nudge early
• Keep it simple
• Focus on recovery
• Anchor expectations
• Make it personal
• Commitment
Behavioural Science led Analytical Approach
Data
Insights
Algorithms
Design
Test
Monitor
Data is gathered from
various sources and
put together for
analysis
Insights are generated
from the raw data
and the data is
preprocessed for
further analysis
Predictive models are
created using
statistical and
machine learning
techniques
Identify
nudges/treatments
to prompt a change
in behaviour
Implement
nudges/treatments
using methods like
Randomized Control
Trials (RCT)
Measure the impact
of the predictive
models and nudges
on various business
outcomes related to
risk and finance
Test, Learn and Adapt
Test MonitorDesign
Analytics
Leverage predictive
models and other
information to identify
treatment groups.
Behavioral Nudges
“Nudge” into better
behavior.
Experiment:
Compare the results
of the RCTs on the
treatment groups
with respect to the
control group to
measure impact of
nudge.
Measure ResultsCustomized Nudges
(Real-time and Flexible)
What Nudges?
Where to implant?
A Few TipsM Messenger
We are all heavily biased by who communicates information
I Incentives
Our responses to incentives are shaped by predictable mental shortcuts such as strongly avoiding losses
N Norms
We are strongly influenced by what others do
D Defaults
We “go with the flow” of pre-set options
S Salience
Our attention is drawn to what is novel and seems relevant to us
P Priming
Our actions are often influenced by sub-conscious cues
A Affect
Our emotional associations can powerfully shape
our actions
C Commitments
We seek to be consistent with our public promises and reciprocate acts
E Ego
We act in ways that make us feel better about ourselves
Based on report published by the Behavioural Insights Unit
Parting Thoughts
Beware of Bias
Bias can ruin any design and skew results. Researchers need to be careful and treat bias.
Nudge for Good
It’s important that we do not use nudges for ones own benefit but use for the greater good
Thank you
Basem Morris
Deloitte ConsultingSydney+61 452 427 [email protected]
Kranthi Ram Nekkalapu
Deloitte ConsultingSydney+61 424 295 [email protected]