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The federal government, the public and the health care industry has had an example of how disastrous mismanaged technology can be with the catastrophic roll out of Obamacare in October. The hindsight of that disaster may prompt some foresight into technology planning for the workers’ compensation industry. Top technology initiatives for workers’ compensation insurers include agent portal, business intelligence, and core claims and policy administration implementations, according to a new report on the sector from Novarica, titled “Business and Technology Trends: Workers’ Compensation” Whereas other areas of the enterprise are seeing some investments in enhancements, the report points to these technology initiatives as a competitive necessity.

Novarica went on to detail workers’ comp insurer needs, saying, agent portals continue to be viewed as key elements of acquiring and retaining customers, requiring user-friendly functionality for quoting and new business submissions as well as access to loss run reporting/analysis and support services.

Business intelligence and analytics are viewed as key competitive capabilities if the ability to gather, store and retrieve appropriate data leads to insights. Workers’ comp insurers often have existing capabilities for reporting and analysis in claims and underwriting, but are expanding their business intelligence capabilities to operationalize predictive analytics. It is increasingly common for insurers to use third-party data and multidimensional data in their analyses.

In its overview of core systems priorities, Novarica lists among the key features desired, “Data, data and more data.” Beyond that, automated underwriting, more accurately and consistently assessing risk and pricing using business rules and predictive models, and other capabilities enabled by rating engines, workflow management and added functionality for agents are among insurer top priorities for core systems investments.

Core claims systems, which Novarica calls “the most critical core system for workers’ compensation carriers,” is another emphasized area of investment. Insurers seek increased operational efficiencies, improved data use, automated reserving and new techniques for identifying fraud, such as predictive analytics and network analysis.

The financial trends for the sector, as outlined by Novarica, reveal the fact that the sector’s woeful combined ratio recovered slightly last year, from 116.6 percent in 2010 to 117.1 percent in 2011, then back down to 116.0 percent in 2012. Another dubious trend currently seen by workers’ comp insurers is an increasing number of questionable and fraudulent claims.

The sector’s redeeming financial trends include nine straight quarters of rate increases, including 9-percent premium growth in 2012.

Lower priority technology initiatives include billing, customer portals, distribution management, document creation and management, rating, underwriting workstations, and specialized components. Technology initiatives in these areas are more about enhancements than competitive necessity, e.g. distribution management initiatives are mostly focused on streamlining onboarding and compliance, according to the report.

While mobility has not become a pervasive technology in the sector, the report notes that mobile devices are making inroads. Most workers’ compensation mobile applications currently focus on loss control, with TPAs offering apps with injury reporting and other claims self-service functionality.