Exposing Insurance Claims Processing Impediments

Background

About. This case study was conducted as a collaboration between Queensland University of Technology (QUT) and the Queensland Government’s  Motor Accident Insurance Commission (MAIC). MAIC administers Queensland’s Compulsory Third Party Insurance scheme which provides compensation to persons other than the “at fault” driver for injuries sustained in a motor vehicle accident. An arm of MAIC, the Nominal Defendant determines liability for, and manages claims by injured persons where the ‘at fault’ vehicle is unregistered or unidentified. While the relevant legislation mandates milestones for claims processing, the Nominal Defendant nevertheless experiences significant behavioural and performance variations in CTP claims processing affecting claim costs and durations, the reasons for which are only poorly understood.

Objective.  This case study aimed to apply process mining techniques to discover process model/s and perform comparative process performance across different cohorts of claims (e.g. direct vs. legal represented claims, claims involving unregistered vs. unidentified vehicles), and to reveal the context factors that influence claim duration and cost.

Key Questions. The main questions for this case study included:

  • What are the performance differences (based on efficiency) between unregistered and unidentified cases?
  • What are the performance differences (based on efficiency) between direct and legal represented cases?
  • What are the most significant factors to decide whether a claim being a short or long duration case?

Data. The dataset was extracted from the claims management systems of Nominal Defendant. The data was cleaned and filtered in consultation with stakeholders, resulting in an event log consisting of 1,523 cases (1,049 finalised claims and 474 open claims), which were either finalised in the period between September 2012 and November 2015, or lodged since September 2012. Associated context factors were derived from interviews with Nominal Defendant staff and literature relating to personal injury compensation.

Approach. Automated process discovery and comparative performance analysis was undertaken with the aim of discovering points of difference in claims processing across cohorts of interest to the Nominal Defendant. In parallel, we conducted a context analysis with the aim of uncovering the context factors that affect claim duration and cost.

Results and Impact

  • Claims involving an unregistered vehicle generally proceeded, in the initial phase of claims processing (Notification to Liability Decision), faster than those involving an unidentifiable vehicle. However, from this point on, the unidentified vehicle claims were processed faster through to finalization of the claim.


unreg_unid

  • Claims involving direct claimants (i.e. no legal representation) reached key milestone faster than claims where claimants had legal representation.


direct_legal

  • One particular cohort of claims, (injury severity is low, the injury type is whiplash and the claimant is female and middle-aged), showed unusually long claim duration when compared to other low severity and whiplash claims.
  • The decision by ND to appoint its own legal advisor was the key factor in differentiating between short and long cases.
  • The requirement for an independent medical examination was the significant factor to differentiating between low and high cost cases.

Publication

A book chapter based on this study is under review.