Employer Gut Feelings Changed Post-pandemic?
After researching this topic, AI recommended I use intuition instead of gut feelings. As I do not use or listen to AI, let us stick with gut feelings. I originally wrote an article on employer gut feelings in 2016 on this topic. I compared intuition with predictive analytics.
The accuracy of predictive analytics has improved over the last eight years since I wrote the article. The commentors on the article recommended that I accept that predictive analytics remains superior to gut instincts.
Environment Changed – Not the Interpretation
According to an informative article in Psychology Today on trusting gut feelings:
Intuition is a highly sophisticated process. We notice patterns through past experiences, store these patterns and associated information into long-term memory, and then retrieve the information when we see these patterns again in our environment.
When I wrote the article yesterday on workers comp budgeting after the pandemic, the subject of employer intuition came up as we are seeing new levels or variables that have not been in place since the 1980s such as inflation and interest rates.
The “patterns we see again” referenced in the Psychology Today article have not been around for 40+ years. Twenty-year business cycles have been ignored or discounted in the workers comp world. Even Loss Development Factors (LDFs) usually only cover 10 years maximum.
I recommended a twenty-year Experience Mod to match the business cycles. From my discussions with agents and underwriters many workers comp insurers are using longer-tailed predictive analytics than in the past with five years minimum timeframes.
Bottom Line on Employer Gut Feelings
Overall, I think that businesses may want to rely more on predictive analytics without completely substituting AI for common sense. A business owner or risk manager still possesses enough employer intuition to make sound decisions.
