Beecher Carlson’s Kevin Grady Discusses ZOOM® in the Leader’s Edge Article on Predictive Modeling
Beecher Carlson Saves Big with Modeling
Clients are seeing a $5 minimum return on investment for every $1 they spend on Beecher Carlson’s proprietary consulting process, which includes predictive modeling, according to Kevin Grady, the firm’s managing director. “We are able to create revenue specifically as a result of this process,” Grady says.
The firm’s process of predictive modeling, known as ZOOM®, combines underwriting and claims management. Beecher Carlson has offered it to clients for workers comp for three years, and the results are compelling.
“Clients have had double-digit improvements in their average cost per claim,” Grady says. As the claims experience improves, the underwriting predictive model reflects the savings from better claims management in premium and deductible costs. Beecher Carlson’s model includes 40 key performance indicators, such as salary levels, tenure, adjuster performance, diagnosis code and surgery indicators.
Many agents and brokers want to unleash the power of predictive modeling on their books of business, says Chris Gagnon, director of strategic technology at The Council and president of Tiebeam Partners.
The difficulty, he says, is that there “is not a direct path to get there.” Brokers need the resources and technical savvy to build their own modeling systems, and that requires capital and expertise.
Beecher Carlson has invested 40% of its payroll in the casualty space for technology to address claims, the largest cost of risk. This includes in-house actuaries who build the models.