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Technology plays key role in Verizon's claims management strategy

Technology plays key role in Verizon's claims management strategy

Technology and automation are playing increasingly large roles in business and commerce, and Verizon Communication Inc.'s risk management operations are no exception.

From introducing predictive modeling for workers compensation claims to automated file sharing with claims and coverage partners, New York-based Verizon has been busy leveraging technology, upgrading and updating systems.

“A lot of it is just becoming better and more efficient at what we do, and some of that involves automation and technology,” said David G. Cammarata, Basking Ridge, New Jersey-based assistant treasurer for risk management and insurance for the communications technology firm.

With some 4,000 to 5,000 workers compensation claims per year with which to contend, he said he sought to “manage claims instead of just paying bills.”

Following the 80/20 rule that 20% of claims account for 80% of dollars “and by focusing on that 20%, you can really make a difference,” he said.

Deciding both technology and a partner were part of the solution, Mr. Cammarata turned to the idea of predictive modeling and to Memphis, Tennessee-based Sedgwick Claims Management Services Inc. for the assistance he needed.

“The predictive modeling uses 25 to 30 factors that help us identify at a very early stage in the claims' life which claims are going to be the big ones. This helps us focus our efforts a lot better,” he said.

The models used are proprietary and were customized for Verizon by Sedgwick, he said. They were developed in a matter of months after an initial meeting with Sedgwick and went live in mid-2013. “Then it was just setting up a process for handling the claims that popped out of the models,” Mr. Cammarata said.

The program has been so successful that it is being expanded. “We're going to be trialing models for bodily injury claims in the automobile general liability areas in 2015,” Mr. Cammarata said. “I think that workers compensation is more advanced at this time in terms of modeling, but we'll be working with Sedgwick to build the automobile and general liability models.”

“We need to leverage technology to create efficiencies within our current workflow and staffing model,” said William McCullough, national claims manager for treasury and risk management, noting the work being done with predictive modeling in Verizon's claims department and looking forward to the next step to address general liability and auto liability claims. “I hope to get a draft of that model for general liability and auto liability claims in the coming weeks,” Mr. McCullough said. “The use of business intelligence will help us manage our portfolio of claims.”

Integrating electronically with partners is also creating efficiencies. “The largest change we have implemented to date is that we're developing the ability to have a single repository for all claims information in the risk management information system of our third-party administrator,” Mr. McCullough said.

“When I joined Verizon about a year ago, these goals were identified as a high priority. This was Dave's vision,” he said.

“I think the biggest changes we've seen come from an emphasis on analytics and data-driven decision-making,” said Mark Denesevich, director of financial planning and analysis. “We've also more fully exploited the capabilities of our systems to drive efficiency.”

“Under Dave's leadership, we've automated a lot of the functions that were previously done using Excel spreadsheets and email,” Mr. Denesevich said. “We've moved to using Web-based platforms that are more integrated.”

“One thing we are implementing right now is a risk information management system, which will track our policies, manage certificates (and) house property values and other exposure information,” said Danielle Roth, director of risk management.

The predictive modeling initiative, she added, “has been a way to use technology to try to identify claims and triage them.”

Verizon's captive insurers have also benefitted from a technology infusion.

“In the finance area for the captive accounting, we put in an automated insurance and accounting system, which helps us close our books more quickly and provides management with information sooner,” Mr. Cammarata said.

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