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Strategies and technologies to boost
behind-the scenes efficiencies
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SOLUTIONS
ENHANCED DISABILITy
CLAIMS SySTEM
The disability claims system from Portland, Maine-based ClaimVantage is now available with MDGuidelines, a return-to-work (RTW) reference tool-set from Westminster, Colo.-based Reed Group.
With more than 1,300 topics, MDGuidelines
includes evidence-based, physician-reviewed
RT W duration guidelines and a predictive modeling tool that enables case managers to tailor
guidelines to individual employees.
A key product feature of MDGuidelines is
identified as the toolset’s two types of RT W durations: idealized durations, the actual time it takes
for the injury or illness to heal; and real-world durations based on millions of cases. ClaimVantage
says that comparing both types of durations allows case managers to identify psychosocial factors that extend recovery times and apply additional resources as needed to help employees
return to their normal productive endeavors.
ClaimVantage Disability Claim software, distributed through a software-as-a-service (SaaS)
model, is designed to support the full lifecycle of
claims management, including intake, assignment,
eligibility, case management, workflow, tasks, payments and operational reports.
NEw CLAIMS MANAGEMENT SySTEM
Pegasystems Inc., a Cambridge, Mass.-based business process management and customer relationship management software provider, has released
a new insurance claims management system.
The company says that Pega Claims for P&C insurers is designed to provide greater ease-of-use and
faster time-to-value through a single, unified and
strategic platform that supports the varied claims
management needs of insurers. Pega says that its
“Build for Change” technology delivers rapid deployment and increased flexibility without compromising its out-of-the-box functionality.
Pega Claims features case management capabilities, which, the company says, frees up
claims operations from manual, inefficient tasks
by automating work activities and guiding support staff to the next best action, for better
decision making.
ture mortality change: advances in
the treatment of cancer, regenerative
medicine techniques spurred by use
of stem cells, and the retardation of
aging process driven by potential
treatments to slow the process of cell
degeneration.
“The life insurance industry is
going through the same sort of
transformation that we saw in the
natural catastrophe world 10 years
ago,” Coburn says. “Actuarial science
is already well-honed so there’s a lot
of good technique, but there’s still a
need for more contextual informa-
tion. There’s a huge wealth of re-
search published by the medical
community and the drug industry,
we have to filter through it and plug
it back into actuarial models.”
Kinnaird cautions that there’s
only so much modeling can do. For
example, a cure for heart disease or
cancer will be difficult to account
for. “If something suddenly causes
the population as a whole to live
longer, the modeling will struggle
with this.”
MORE THAN MODELS
To be sure, insurers cannot view
more granular or encompassing
modeling as the zenith for better risk
management.
“Risk management is not all
about modeling,” says Bob Wolf, an
actuary and staff fellow, risk man-
agement, at the Society of Actuaries.
“Risk usually doesn’t come from
some exogenous event. Most of the
risk comes from the decisions and
behaviors of people. You need a ho-
listic view of risk because of the
domino effects of decisions.”
Wolf says getting this holistic
view may require a periodic review
of the assumptions underlying risk
models. “Actuaries need to think
outside the box when it comes to
enterprise risk management,” he
says. “Our profession is paid to be
anxious.”
A broader push to reinvigorate a
risk management culture across the
enterprise may also be required.
MANAGING
COMPLIANCE RISK
If the near implosion of the world’s
financial system wasn’t sufficient cause
for a reexamination of risk management, a multitude of new regulations
may well be. Just as the damage
wrought by Hurricane Andrew served
as an impetus to tighten risk management practices among P&C insurers,
these new rules may serve as a similar
function on the life side.
The European Union’s pending
Solvency II regulations will further
codify principles-based reserving
methodologies when implemented
in 2012. This move from a static,
formulaic approach toward an approach that favors dynamic, scenar-io-based models will be profound.
“In a sense, Solvency II is the Hurricane Andrew of the life insurance
industry,” Coburn says.
Interestingly, principles-based
methodologies have been taking
hold in the United States, albeit in a
more modest, piecemeal manner. In
2005, the National Association of
Insurance Commissioners’ C3 Phase
II requirements required writers of
variable annuities to employ sto-
chastic models and base risk-based
capital requirements on principles-
based methodologies. “There was a
general acknowledgment at this
point in time for the life insurance
business that the world was becom-
ing more complex and that the capi-
tal standards really did need a model
to capture the risks associated with
these benefits,” Bennett says “Right
now it’s still a bit of a hybrid ap-
proach. We still have a lot of rules
that govern the way the life insur-
ance industry is regulated, but we’re
moving toward principles slowly.”
The NAIC’s Life Risk-Based Capi-
tal Working Group is currently work-
ing on its C- 3 Phase III require-
ments.
Smith says the gradual roll-out of
these new rules is a good thing. “C3
Phase III requirements are going to
hit insurers, but the lead times are
long,” he says. “It’s taken years of
work to find an approach and then
get everybody comfortable with it.”
Bennett agrees that some growing
pains are inevitable as insurers
and regulators move from a rules-based environment to a principles-based one. “It’s simple to say we’re
moving to a principle-based
approach. It’s much more difficult to
implement it.”
BETTER TOOLS
One technology challenge surrounding compliance risk management Smith foresees is with data aggregation and extraction. “It’s
probably not models that are going
