Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Olrac SPS Predictive Insurance Solutions

91 views

Published on

  • Be the first to comment

  • Be the first to like this

Olrac SPS Predictive Insurance Solutions

  1. 1. www.olsps.com Cape Town Office: Silvermine House, Steenberg Office Park, Tokai, 7945 Tel: +27 (0) 21 702 4111 Johannesburg Office: Office 2, First floor, building 16, The Woodlands, Woodmead, Sandton 2148 Tel: +27 (0) 11 656 0915 Lisbon Office: Rua das Chagas 20 R/C E 1200-107 Tel: +35 (0) 12 1340 5190 PREDICTIVE INSURANCE SOLUTIONS
  2. 2. www.olsps.com INSURANCE CLAIM SEGMENTATION
  3. 3. www.olsps.com OVERVIEW • Segments all incoming short term insurance claims • Ranks claims on likelihood of fraud (0-1) • Low risk = Fast track • High risk = Investigation Low Risk Claims Fast Track Channel Medium Risk Claims Normal Assessment Channel High Risk Claims SIU Channel 0 1Risk Score
  4. 4. www.olsps.com • Direct Claims to the correct assessment channel at First Notification of Loss (FNOL). Basic channels are: • Fast Track (lowest cost processing channel) • Normal Assessment Channel (medium cost processing channel) • Forensic Assessment/SIU (high cost processing channel) • The Goal is Two-Fold: • Increase the proportion of claims that are fast tracked, thereby reducing processing costs • Improve profitability of forensic unit • Spin-off is increased Client Satisfaction OVERVIEW
  5. 5. www.olsps.com SIMPLIFIED LOOK AT THE MECHANICS OF THE SOLUTION CLAIM VARIABLES SEGMENTATION OUTPUT • Driver’s profile • Type of car • Time of accident • … • … • … Business Rules Predictive Models + Low Risk Medium Risk High Risk
  6. 6. www.olsps.com CALCULATION SEQUENCE Claim Reg Score Request P.A Models (2) Risk Rules P.A Model Score Rule Score Risk Matrix Risk Score (0.1, 0.2, 0.3, 0.4, 0.5, 0.6, 0.7, 0.8, 0,9, 1.0) Value Risk Trade-Off Initial Segment Override Rules Segment Recommendation
  7. 7. www.olsps.com CONVERSION OF TWO DIMENSIONS OF RISK TO ONE Highly Decreased Decreased None Increased Highly Increased None 0.1 Low Risk 0.2 Low Risk 0.4 Low Risk 0.5 Medium Risk 0.6 Medium Risk Low 0.3 Low Risk 0.3 Low Risk 0.4 Low Risk 0.5 Medium Risk 0.7 Medium Risk Medium 0.5 Medium Risk 0.5 Medium Risk 0.6 Medium Risk 0.7 Medium Risk 0.8 High Risk High 0.7 Medium Risk 0.7 Medium Risk 0.8 High Risk 0.9 High Risk 1.0 Send to SIU PREDICTIVE ANALYTICS SCORE JUDGEMENTRULES SCORE 0 1 Min Max
  8. 8. www.olsps.com VOLUME SIMULATIONS – SEGMENT THRESHOLDS Predictive Models Risk Score BusinessRulesRiskScore % CLAIM IN EACH RISK LEVEL
  9. 9. www.olsps.com VALUE PROPOSITION: SIU & FAST TRACK 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 0 10000 20000 30000 40000 50000 % FRAUD ILLUSTRATIVE FRAUD EXISTING ILLUSTRATIVE FRAUD FUTURE CLAIMS RANKED BY FRAUD SCORE DESCENDING ACTUALFRAUD%: AVERAGEFRAUD%X100
  10. 10. www.olsps.com BENEFITS OF THE SOLUTION SIU CLAIMS ORDINARY CLAIMS FT/EXPRESS CLAIMS Increased Repudiations Reduced Handling Costs Increased Customer Satisfaction
  11. 11. www.olsps.com INSURANCE CLAIM SEGMENTATION USE-CASE
  12. 12. www.olsps.com SUPPLIER RANKING
  13. 13. www.olsps.com PROBLEM DESCRIPTION • Large insurers often use in excess of 1 000 MBRs to facilitate repair • Costs and capabilities of MBRs vary greatly • Detailed information available on claims & costs We need to develop a way to leverage the information that we have in order to unlock the cost-saving potential POTENTIAL FOR COST SAVING
  14. 14. www.olsps.com MARK UP BASED APPROACH • Mark up % on each component of repair is obtained from each MBR • Score is calculated for each mark up % • Overall discount offered by MBR is also considered • All components are combined into an overall score EMPIRICAL APPROACH USING PREDICTIVE ANALYTICS • Each repair done by each MBR is considered over a time period • Repairs are ‘normalised’ so that different repairs can be compared to each other • Repair cost per MBR is averaged over all its repairs • Average repair cost per MBR is used to obtain relative cost effectiveness TWO METHODS TO TACKLE PROBLEM
  15. 15. www.olsps.com MBR 1 • Labour cost = R500/hr • Fairly allocates labour to jobs • Repairs parts where possible MBR 2 • Labour cost = R500/hr • Over-allocates labour to jobs • Replaces all parts with new POSSIBLE SHORTCOMING OF MARK UP APPROACH MARK UP BASED SYSTEM SEE THESE AS EQUIVALENT INTRODUCING ROOM FOR EXPLOITATION PREDICTIVE APPROACH USES ACTUAL COSTS CHARGED – IMPOSSIBLE TO EXPLOIT VS
  16. 16. www.olsps.com RANKING GRAPH
  17. 17. www.olsps.com RANKING GRAPH
  18. 18. www.olsps.com SUPPLIER RANKING USE-CASE
  19. 19. www.olsps.com NOTES

×