Risk Management Data Types and Their Value

Risk management data can make your business more transparent, efficient and flexible. In this session at the WSIA 2020 Annual Conference, Consulting Actuary Mary Daly, a principal in Oliver Wyman’s Los Angeles office, explains the uses of varying types of risk management data and how each provide immense value to your organization.

Why Invest in Advanced Data?

While aggregated data can provide helpful insight in the workers’ compensation industry, it tends to be limited. Extended types of data can allow us to be more proactive than reactive. Economic uncertainty is the perfect time to invest in technology because it:

• Improves analytics, helping the management to better understand the business.
• Can help cut costs, since projects that automate tasks or adopt data-driven decision pay off quickly.
• Makes a company more agile and better able to handle uncertainty and rapid change.

Common Uses of Risk Management Data

• Determining reserves/loss pick
• Comparing actual vs. expected losses
• Negotiating collateral/premium
• Optimizing risk management program structure

Elevated Risk Management Types and Their Uses

• AI-Aided Visualization
  • Identifies cost drivers
  • Tracks risk management initiatives
  • Monitor third-party administrators
  • Improves communication
  • Alerts a user on what trends are of concern and where to look
  • Saves time and narrows an organization’s focus on where to increase safety, helping to reduce a company’s costs
• Predictive Analytics
  • Identifies large claims
  • Optimizes intervention and reserving
  • Leverages unstructured data
  • Provides helpful predictions of future outcomes
  • Assesses difficulty in a claim and helps to allocate resources appropriately
  • Can help predict which claims may result in litigation
• Equitable Cost Allocations
  • Incentivizes safety
  • Enhances accountability
  • Benchmarks internally
  • Educates managers
  • Provides an equitable distribution of costs
  • Data could provide for financial incentives to reduce losses
  • Holds a division/location leader accountable
  • Benchmarks an individual experience vs. the total