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Predictive Model For Workers Comp Misunderstanding

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Prior WC Predictive Model Article Was Referring To Claim Reserves

Last Friday,  I published a blog article on a predictive model in Workers Compensation.  A few emails were received that indicated there were many great software products for predicting E-Mods and other variables in Workers Compensation.

Big Data Predictive Model Text Graphic
Wikimedia Commons – Camelia.boban

In the original article, I was mainly referring to the fact I have yet to see any predictive model type program that could ever come close to forecasting the reserves for the life of a WC claim.  We have reviewed a large number of WC  files where a predictive model was used to set the reserves on a file.

The best analytic program model for worker’s compensation reserves is an experienced adjuster handling the same type of injury, employer, and state jurisdiction. 

Those reserves had to always to overridden by the adjuster (usually with supervisory approval) at some later point in the file.  The healing time of the human body is almost a random length between injured employees.   Claims have too many almost random variables in them for claims analytics. 

If Liberty Mutual ever shares their massive WC database, we may actually be able to have predictive modeling for claims.

My next article is on Statistics Madness.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications

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