Milliman has announced the launch of gradient A.I. (formerly MillimanMAX), an advanced analytics platform that uncovers hidden patterns in big data in order to improve workers’ compensation claims management. The gradient A.I. platform is a transformative InsurTech technology built on the latest advanced techniques and artificial intelligence (A.I.), and delivers a daily decision support system (DSS) for insurers and self-insurers.
Milliman has been conducting research and development in the most advanced areas of artificial intelligence—also known as “deep learning”—for over five years, and the rebranding of gradient A.I. is a reflection of that enhanced experience. Our goal with gradient A.I. is to deliver the most actionable intelligence to our clients in the form of “decision support—and we’re pleased to note that so far clients have seen underwriting profit improvements of 3% to 5% and claim cost reductions in the neighborhood of 5% to 10%.
The key differentiator of gradient A.I. is its ability to identify relationships between structured and unstructured data, unlocking powerful and previously unknown information to deliver a competitive advantage to self-insured groups, carriers, and third-party administrators within the property and casualty (P&C) market. Additional product features include a custom data warehouse, easily identifiable and actionable risk drivers, dynamic reporting, and customizable reports and dashboard.
To learn more, click here.
The workers’ compensation environment in California has been surprisingly stable over the last several years. Despite this stability, workers’ compensation remains one of the most complex exposures for employers. This study by Milliman’s Richard Lord and Stephen Koca and Keenan’s Bill Poland and Daniel Mattioli provides fundamental healthcare industry benchmarks from which informed decisions related to managing workers’ compensation in California can be made.
Self-insureds that understand the factors used by actuaries to project workers’ compensation losses can better integrate them into their projection processes and benefit from insightful discussions with actuaries. Milliman consultants Carly Rowland and Richard Frese offer some perspective in the Business Insurance article “Ten considerations for projecting self-insured workers compensation losses.”
Earlier this year, the Florida Supreme Court ruled that state law limiting attorney fees in workers’ compensation insurance cases was unconstitutional. The law was found to prevent challenges to the “reasonableness” of attorney’s fees awarded in such cases. In this article, Milliman consultant Simon Wong provides a brief history of Florida’s workers’ compensation system, discussing how the court’s ruling will affect carriers and self-insured employers moving forward.
Here’s an excerpt:
The court thus found the “irrebuttable presumption,” or inability of any claimant to challenge the fee, to be unconstitutional. In striking down the fee law, the court directed the state to return to previous law “until the Legislature acts to cure the constitutional infirmity,” essentially returning Florida’s workers’ compensation attorney fees structure to the pre-SB 50A system based on hourly fees. The decision emphasizes that “the fee schedule remains the starting point, and that the revival of the predecessor statute does not mean that claimants’ attorneys will receive a windfall. Only where the claimant can demonstrate … that the fee schedule results in an unreasonable fee—such as in a case like this—will the claimant’s attorney be entitled to a fee that deviates from the fee schedule.”
The concern is that this also means a return to the high pre-SB 50A levels of attorney-represented claim costs. In response to the Castellanos decision, the NCCI initially proposed a rate increase of 17.1% to new, renewal, and all in-force policies effective on or after August 1, 2016.1 Subsequently, the NCCI proposed amending the filing to include the impact of the Westphal decision as well, and proposed a rate increase of 19.6% effective October 1, 2016.2 It should also be noted that the Castellanos and Westphal decisions have a retroactive impact on all claims that remain open or are reopened on or after July 1, 2009, and January 1, 1994, respectively. Because workers’ compensation rate-making is prospective only, insurers are not able to recoup premium to cover such unforeseen retroactive system costs.
For now, carriers and self-insured employers can look for increasingly more expensive workers’ compensation claims in Florida. Unless a legislative solution of some kind emerges, they should start preparing for higher attorney’s fees. More changes from the courts and the legislature are almost certain and should be monitored closely.
The selection of loss development tail factors for workers’ compensation claims may have a significant impact on the unpaid claim liability for years. Milliman has created and used a workers’ compensation database that includes $55 billion of incurred losses to assist in selecting appropriate tail factors. In this article, Milliman’s Tony Bloemer and Tim Vosicky explain how selecting tail factors that consider three key variables—retention, location, and industry—can prevent understated or overstated incurred but not reported (IBNR) estimates.
Research shows that obesity is more than a major health problem in the United States. Obesity is also having adverse financial effects on industries like workers’ compensation insurance. A high percentage of claims related to obese and overweight claimants has resulted in more expensive workers’ comp payments. Milliman consultant Christine Fleming recently wrote a Best’s Review article explaining how the following processes can help insurers manage claims involving obesity and effectively assist injured claimants with obesity-related issues.
• Document information about claimants
• Carve out an obesity claims unit
• Communicate with claimants
• Consider early intervention of medical management
• Implement training on settling claims
• Consider incentives for employers
• Keep employees active
To read Christine’s article, “A weighty issue: Obesity and the implications for workers’ compensation,” click here.