STD – to – LTD claims conversion prediction
3AI August 15, 2020
Leading USA based Life & Disability insurance company
Problem Statement
- Most of the short-term disability claims are getting converted to long term disability claims which leads to inappropriate reserving
- No system to predict the short-term disability claims getting converted to long term disability claims in advance
Analytics Led Approach
Given are high level process steps which were followed
- Data Pre-processing
- Logistic Regression Model creation
- New short-term disability claim
- Output is going to be wither of the following:
- Less likely to get converted to LTD claim
- Likely to get converted to LTD claim
Business Impact
- A predictive analytical model using Logistic Regression algorithm to identify short term disability claims having high propensity for conversion to long term disability claim was designed
- Utility mechanism to score the incoming short-term disability claims against the STD – to – LTD Conversion predictive model was created
Critical Success Factors
- Helps to manage and determine claims reserving more efficiently
- Identify fraudulent claims earlier in the life cycle of claims
- Helps to predict the possible duration of a claim and total expected loss and adjustment expenses associated with it
- Recommend for better nursing care in advance to improve customer centricity and profitability
- Helps to determine the leave period in advance
