ACE Group

With operations in 54 countries, ACE Group is one of the largest multiline property and casualty insurance companies in the world.

Sponsored Content by ACE Group

6 Truths about Predictive Analytics

ACE's predictive analytics tool provides a new way to capture, analyze and leverage structured and unstructured claims data.
By: | October 1, 2015 • 6 min read

Predictive data analytics is coming out of the shadows to change the course of claims management.

But along with the real benefits of this new technology comes a lot of hype and misinformation.

A new approach, ACE 4D, provides the tools and expertise to capture, analyze and leverage both structured and unstructured claims data. The former is what the industry is used to – the traditional line-item views of claims as they progress. The latter, comprises the vital information that does not fit neatly into the rows and columns of a traditional spreadsheet or database, such as claim adjuster notes.

ACE’s recently published whitepaper, “ACE 4D: Power of Predictive Analytics” provides an in-depth perspective on how to leverage predictive analytics to improve claims outcomes.

Below are 6 key insights that are highlighted in the paper:

1) Why is predictive analytics important to claims management?

ACE_SponsoredContentBecause it finds relationships in data that achieve a more complete picture of a claim, guiding better decisions around its management.

The typical workers’ compensation claim involves an enormous volume of disparate data that accumulates as the claim progresses. Making sense of it all for decision-making purposes can be extremely challenging, given the sheer complexity of the data that includes incident descriptions, doctor visits, medications, personal information, medical records, etc.

Predictive analytics alters this paradigm, offering the means to distill and assess all the aforementioned claims information. Such analytical tools can, for instance, identify previously unrecognized potential claims severity and the relevant contributing factors. Having this information in hand early in the claims process, a claims professional can take deliberate actions to more effectively manage the claim and potentially reduce or mitigate the claim exposures.

2) Unstructured data is vital

The industry has long relied on structured data to make business decisions. But, unstructured data like claim adjuster notes can be an equally important source of claims intelligence. The difficulty in the past has been the preparation and analysis of this fast-growing source of information.

Often buried within a claim adjuster’s notes are nuggets of information that can guide better treatment of the claimant or suggest actions that might lower associated claim costs. Adjusters routinely compile these notes from the initial investigation of the claim through subsequent medical reports, legal notifications, and conversations with the employer and claimant. This unstructured data, for example, may indicate that a claimant continually comments about a high level of pain.

With ACE 4D, the model determines the relationship between the number of times the word appears and the likely severity of the claim. Similarly, the notes may disclose a claimant’s diabetic condition (or other health-related issue), unknown at the time of the claim filing but voluntarily disclosed by the claimant in conversation with the adjuster. These insights are vital to evolving management strategies and improving a claim’s outcome.

3) Insights come from careful analysis

ACE_SponsoredContentPredictive analytics will help identify claim characteristics that drive exposure. These characteristics coupled with claims handling experience create the opportunity to change the course of a claim.

To test the efficacy of the actions implemented, a before-after impact assessment serves as a measurement tool. Otherwise, how else can program stakeholders be sure that the actions that were taken actually achieved the desired effects?

Say certain claim management interventions are proposed to reduce the duration of a particular claim. One way to test this hypothesis is to go back in time and evaluate the interventions against previous claim experience. In other words, how does the intervention group of claims compare to the claims that would have been intervened on in the past had the model been in place?

An analogy to this past-present analysis is the insight that a pharmaceutical trial captures through the use of a placebo and an actual drug, but instead of the two approaches running at the same time, the placebo group is based on historical experience.

4) Making data actionable

Information is everything in business. But, unless it is given to applicable decision-makers on a timely basis for purposeful actions, information becomes stale and of little utility. Even worse, it may direct bad decisions.

For claims data to have value as actionable information, it must be accessible to prompt dialogue among those involved in the claims process. Although a model may capture reams of structured and unstructured data, these intricate data sets must be distilled into a comprehensible collection of usable information.

To simplify client understanding, ACE 4D produces a model score illustrating the relative severity of a claim, a percentage chance of a claim breaching a certain financial threshold or retention level depending on the model and program. The tool then documents the top factors feeding into these scores.

5) Balancing action with metrics

ACE_SponsoredContentThe capacity to mine, process, and analyze both structured and unstructured data together enhances the predictability of a model. But, there is risk in not carefully weighing the value and import of each type of data. Overdependence on text, for instance, or undervaluing such structured information as the type of injury or the claimant’s age, can result in inferior deductions.

A major modeling pitfall is measurement as an afterthought. Frequently this is caused by a rush to implement the model, which results in a failure to record relevant data concerning the actions that were taken over time to affect outcomes.

For modeling to be effective, actions must be translated into metrics and then monitored to ensure their consistent application. Prior to implementing the model, insurers need to establish clear processes and metrics as part of planning. Otherwise, they are flying blind, hoping their deliberate actions achieve the desired outcomes.

6) The bottom line

While the science of data analytics continues to improve, predictive modeling is not a replacement for experience. Seasoned claims professionals and risk managers will always be relied upon to evaluate the mathematical conclusions produced by the models, and base their actions on this guidance and their seasoned knowledge.

The reason is – like people – predictive models cannot know everything. There will always be nuances, subtle shifts in direction, or data that has not been captured in the model requiring careful consideration and judgment. People must take the science of predictive data analytics and apply their intellect and imagination to make more informed decisions.

Please download the whitepaper, “ACE 4D: Power of Predictive Analytics” to learn more about how predictive analytics can help you reduce costs and increase efficiencies.


BrandStudioLogoThis article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with ACE Group. The editorial staff of Risk & Insurance had no role in its preparation.

With operations in 54 countries, ACE Group is one of the largest multiline property and casualty insurance companies in the world.
Share this article:

Sponsored Content by ACE Group

11 Critical Risks Facing the Healthcare Industry

Healthcare providers continue to face numerous emerging challenges.
By: | June 1, 2015 • 5 min read

From pandemics to violence in hospitals, alarm fatigue to healthcare-acquired infections, healthcare organizations will be put to the test in the coming months and years.

Added pressure from new regulatory requirements under the Affordable Care Act makes the future even more challenging.

ACE_BrandedContentWhen you factor in the daily demands healthcare organizations face in their quest to provide quality patient care, it’s clear that there are many hurdles that can disrupt facility operations and put employee and patient safety at risk.

”Today’s healthcare landscape is arguably the most difficult ever,” said Diane Doherty, Vice President, ACE Medical Risk Group. “If not managed properly, these critical issues can cause other unwanted outcomes such as an increase in medical malpractice and workers’ comp claims, government fines and penalties, and may negatively impact the organization’s brand and reputation.”

The following are some of the top critical issues facing hospital leadership.

1) Cyber Risk

ACE_BrandedContentThe healthcare industry’s move to electronic healthcare records has created new patient privacy exposures as records are more easily accessed by consultants, vendors and other third parties for efficient operation, and targeted by cyber criminals. Additionally, healthcare organizations face exposure to cyber risks that could have significant impacts on their operations, including shutting down critical, health-related systems.

Data breaches and network disruptions can jeopardize an organization’s financial stability, security and reputation. Standard general liability policies often do not adequately cover perils associated with cyber and technology related exposures. Cyber liability insurance can address coverage gaps while also enabling companies to transfer risks associated with cyber, such as patient privacy and notification, crisis management, and forensic analysis expenses as well as certain regulatory fines, indemnity payments and legal costs.

“Cyber hacks and data breaches are a major issue facing the healthcare industry today,” said Renee Carino, Vice President and Chief Underwriting Officer, ACE Medical Risk Group. “It’s important now more than ever, that healthcare organizations work closely with their insurance carrier to assess this exposure and develop effective risk management strategies and ensure the proper coverage is in place.”

ACE_BrandedContent”Today’s healthcare landscape is arguably the most difficult ever. If not managed properly, these critical issues can cause other unwanted outcomes such as an increase in medical malpractice … and may negatively impact the organization’s brand and reputation.”
— Diane Doherty, Vice President, ACE Medical Risk Group

2) Healthcare Infections

ACE_BrandedContentHealthcare-acquired infections (HAIs) cost the U.S. healthcare system billions of dollars each year and lead to the loss of tens of thousands of lives.  At any given time, about 1 in 25 hospital patients has at least one such infection, according to the Centers for Disease Control and Prevention. Healthcare-acquired infections also come with a financial price, costing up to $9.8 billion a year, according to research published in 2013 in JAMA Internal Medicine.

Among many solutions, healthcare organizations should ensure all sanitation systems are up to date, operational and ensure that staff understands how to properly use the systems to keep patients safe. They also should continue to remind staff and visitors about basic infection control techniques.

“Basic infection control techniques should be at the forefront of the risk management process,” said Doherty. “For example, it’s critical that medical personnel must wash their hands with antiseptic soap and water every time they treat patients to help reduce the spread of infections.”

3) Telemedicine

ACE_BrandedContentAdvances in technology, the current physician shortage and the dramatic increase in the number of patients seeking care under the Affordable Care Act have led a growing number of healthcare facilities to expand their use of telemedicine to deliver services to patients in hospitals as well as in remote locations. Over half of all U.S. hospitals now use some form of telemedicine to treat patients.

Telemedicine may also result in allegations of negligence if healthcare providers do not have the proper training, experience and credentials. Currently, there is no federal standard of clinical guidelines for telemedicine.

In developing strategies to mitigate this risk, a few key processes and areas that should be examined include credentialing and peer review, medical staff by-laws and of course, CMS guidelines.

ACE_BrandedContent“It’s important now more than ever, that healthcare organizations work closely with their insurance carrier to assess this exposure and develop effective risk management strategies and ensure the proper coverage is in place.”
— Renee Carino, Vice President and Chief Underwriting Officer, ACE Medical Risk Group

4) Violent Incidents in Hospitals

ACE_BrandedContentHospitals may be places of healing, but they also have become the scene of an increasing number of violent incidents. Such incidents not only put patients at risk but also medical professionals, who are often the targets of attacks, harassment, intimidation and other disruptive behavior.

The incidence rate for violence and other injuries in the healthcare and social assistance sector in 2012 was over three times greater than the rate for all private industries. The Joint Commission, meanwhile, reports increasing rates of assault, rape and homicide in healthcare facilities. Perpetrators can include patients, family members, visitors and vendors as well as current and former healthcare employees.

Hospitals and healthcare organizations should enact a zero-tolerance policy, one that states that no form of violence — physical, verbal or psychological — will be tolerated, and that all offenders will be subject to disciplinary action, including termination.

“Healthcare organizations should develop a comprehensive violence prevention program that is specific to their organization and analyzes potential safety hazards and implements strategies to prevent them,” Carino said.

5) Alarm Fatigue

ACE_BrandedContentHospital nurses hear them constantly — the beeps and chirps of alarms on medical devices, such as ventilators, cardiac monitors and pulse oximetry devices. While alarms are designed to draw attention to a potential problem, they can easily be tuned out by overwhelmed medical professionals, who may then fail to respond as they should.

Alarm fatigue is a growing problem for hospitals and the consequences can be fatal. The Joint Commission’s Sentinel Event database includes reports of 98 alarm-related events between January 2009 and June 2012. Of the 98 events, 80 resulted in death, 13 in permanent loss of function and five in unexpected additional care or extended stay. Alarm fatigue was rated a top concern by 19 out of every 20 hospitals in the United States, according to a national survey presented at the annual meeting of the Society for Technology in Anesthesia in 2014.

To reduce the risk of patient harm from alarm fatigue, the Joint Commission, along with the Association for the Advancement of Medical Instrumentation and the ECRI Institute, offered a list of precautions, including ensuring that there is an effective process in place for safe alarm management and response in high-risk areas.

Additional Risks

6) Preparedness for Pandemics

7) Healthcare Reform/Physician Integration

8) Disruptive Staff Behavior

9) Environmental Pollutants

10) Emergency Preparedness

11) Obesity Epidemic

Please download the whitepaper, “Critical Risks Facing the Healthcare Industry” to learn more about the additional risks listed above. The paper also provides a deeper perspective on the risks covered in this article as well as additional risk management recommendations.


BrandStudioLogoThis article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with ACE Group. The editorial staff of Risk & Insurance had no role in its preparation.

With operations in 54 countries, ACE Group is one of the largest multiline property and casualty insurance companies in the world.
Share this article:

Sponsored Content by ACE Group

Contractors Face Complex Insurance Scenario

Contractors should consider many factors when building a multinational insurance program.
By: | October 1, 2014 • 5 min read

With today’s expanding global marketplace, U.S.-based construction companies naturally seek growth opportunities in foreign countries. For instance, China has been on a decades-long building spree. Middle Eastern nations continue to invest in massive developments. Cross-border construction activity among developed countries, particularly in Europe and Japan, remains robust.

That’s the good news for U.S. contractors considering or already involved in global projects. On the flip side, it’s critical to realize that international opportunities present different challenges than domestic projects.

Construction services represent a significant portion of global trade. World exports of construction rose 2% (to $115 billion) in 2012, the World Trade Organization estimates. The European Union and Asia represent the major share of that trade. Yet, while international trade in construction is on the rise, every country retains its own laws regarding insurance, so building a multinational insurance program represents a significant challenge.

ACE’s recently published whitepaper, “Global Construction: International Opportunities, Local Risks” focuses on educating risk managers about the complexities of going global.

Key issues for contractors to consider include:

Unique challenges

SponsoredContent_ACELegally speaking, compliance for U.S. contractors operating outside the U.S. is much more complex than for their domestic operations. For example, by operating in different countries, multinational contractors must adhere to a myriad of local national laws and regulations regarding the “duty of care” they owe to the general public and other third parties. While most of the developed world has established employer duty-of-care legislation, the majority of the countries where many of these new global projects are available have not. A contractor’s insurance program should be flexible enough to handle claims in several different jurisdictions and provide adequate coverage for awards granted in emerging, as well as developed, legal jurisdictions.

Continuity of coverage across borders

For projects in foreign countries, a proactive risk management strategy should not only address the wide range of exposures typical in a given construction project, but also the impact that the differing local laws and regulations may have on the insurance coverage. For example, a contractor may have to obtain local insurance policies for various lines of business to cover the risks associated with its operations and to be compliant with local insurance requirements.

Building multinational solutions

SponsoredContent_ACEA multinational program using “non-admitted” coverage can be a cost-effective alternative to local coverage. Such non- admitted coverage is usually arranged in the parent company’s home country to insure exposures in other countries. Some countries, however, don’t allow non-admitted coverage, while others may allow it subject to conditions such as prior approval. In the past the threshold question was whether non-admitted insurance could be used, but today companies should also consider potential changes in enforcement practices as well as evolving regulations.

Local services can be crucial

Besides compliance issues, companies should address issues such as how local claims will be handled and paid, and which other local services they may need in the event of a claim or incident. For example, companies building projects in the European Union may want to purchase environmental coverage that responds to the demands of the European Environmental Liability Directive in order to provide proper insurance protection for potential liability associated with damage to the environment or natural resources. On a broader level, catastrophe planning should be part of a global risk management strategy.

Public/private partnerships may bring new risks

Another consideration for contractors revolves around project structure. Typically in the U.S., construction projects have been driven either by the owners or the contractors and the insurance coverage reflected that through an owner- or contractor-controlled insurance program (OCIP/CCIP). Today, while more U.S. projects are being structured as public-private partnerships, because the structure is more common in Europe, U.S. contractors considering projects abroad may encounter it for the first time. Public-private partnerships raise questions about how risks and liabilities are apportioned among the parties, so contractors may find themselves sharing responsibility for risks that are not typically part of a standard project, or have increased exposures for professional liability.

M&As can impact insurance programs

SponsoredContent_ACEWith the growth of the global construction economy, and the rising need for the development or improvement of infrastructure in emerging economies, an increasingly multinational approach has led to consolidation and merger-and-acquisition activity in the construction marketplace. As this trend continues, companies also need to consolidate their insurance programs to achieve better efficiency by individual lines of business and to meet insurance requirements in different countries.

The takeaway: local risks, global solution

For contractors working in more than one country, maintaining consistent insurance coverage across borders while controlling costs clearly presents a number of challenges. By using a controlled master policy and admitted insurance from local carriers, contractors potentially gain greater insight into their claims trends and an increased ability to identify locations experiencing significant losses. With this information, contractors also will be in a better position to take corrective action and reduce losses.

Finally, while varying insurance regulations and markets must be addressed, contractors should evaluate the insurance carrier, its experience and presence in foreign markets and its relationships with local insurers around the world. When it comes to international construction projects, the right insurance coverage will play a crucial role in long-term success.

To learn more about how to manage global contracting risks, read the ACE whitepaper: “Global Construction: International Opportunities, Local Risks.”


This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with ACE Group. The editorial staff of Risk & Insurance had no role in its preparation.

With operations in 54 countries, ACE Group is one of the largest multiline property and casualty insurance companies in the world.
Share this article: