Work Comp Predictive Models
There are so many articles on Work Comp predictive models out in the blogosphere. Many taut their ability to see into the future. I am not a big fan of predictive models as I have yet to see and am still waiting on one that is consistent in nature.
One of the larger carriers in the nation had a predictive algorithm for setting claim reserves. The reserves were off approximately 60% when I attempted a loss run review. The carrier has since quit using the algorithm.
Some types of insurance can be held up to a predictive model such as automobile or property loss. Workers comp predictive models attempt to predict how the human body heals as part of its forecasting.
The healing of the human body is such a random event. In that same light, I came across an article that seemed to say gut feelings is actually a learned predictive algorithm learned since birth. The article published in Inc magazine was an interesting take on how we all carry around a built in algorithm.
A great passage from the article – “the more we experience- the more accurate our gut instincts become.”
The great Cris Carter- (former Vikings receiver) said the players that practice more seem to have more luck.
If you follow the link to the article, there is a great example of how Gary Player the golfer used gut instinct as part of his luck.
Workers comp adjusters develop this “gut instinct” after 5 – 7 years of experience on which claims to question; how much medical reserves to place on a file; which claims need another medical opinion; etc.
As I have often mentioned, if I happen to come across any Work Comp predictive models or algorithms that work, I will laud it heavily- but then again I am still waiting.
I will publish a similar article on how this all fits in with a business owner next time.
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