Competing to Automate: Winning with Data

June 6, 2023

I’m excited to kick off a blog series about achieving full automation in the medical professional liability (MPL) industry. As automation transforms organizations across all sectors, digital transformation for the insurance industry is urgent. We’re not just talking about streamlining processes and digitizing forms. It’s about leveraging vast troves of high-quality data to drive true business transformation. Personal insurance–think home and auto–has already paved the way, automating everything from applications and underwriting to claims management. Now, we must elevate MPL to keep pace. Join me for an in-depth exploration of the journey ahead.

Preverity has achieved what others thought was impossible. We have developed proprietary analytics that hold the key to unlocking the power of workflow automation for malpractice insurance. With access to vast datasets brimming with information about medical procedures, MPL insurers can make more informed, faster decisions with greater efficiency and lower costs. Through data-driven insights, underwriters can place a provider in a Rate Class, assess risk and identify areas of potential improvement, enabling them to provide superior coverage for their customers.

Better underwriting is just the start. The insights that support individual underwriting also provide the basis for workflow automation. In upcoming blogs, I’ll explore how workflow automation can help MPL insurance providers improve operations, reduce costs, and increase efficiency. Stay tuned!

Automation gets rolling with auto.

Let’s start with proven examples of insurance automation. Several lines of insurance, notably personal auto, paved the way for automation because they tapped into existing data for driving records. Personal Auto insurance companies contribute claims information to an industry database called C.L.U.E. by aggregating and analyzing C.L.U.E data to model potential future claims, providing the quoting process.

As homeowners insurance followed auto’s lead, up to 95 percent of personal lines policies may undergo straight-through processing (STP) with no underwriter involvement.

With the increasing complexity of medical procedures and the evolving roles of medical professionals, MPL underwriters need access to the latest technologies to help them stay ahead of potential risks and emerging liabilities. Given the rapid change in medical care in the United States, MPL claims data alone cannot accurately predict future losses. Fortunately, we’ve developed vast datasets about medical procedures to identify how care delivery is changing and where they may be exposed to unexpected risks.

How data-fueled automation will transform the MPL landscape.

The medical professional liability (MPL) insurance market can now leverage vast medical datasets to make well-informed decisions about coverage. Preverity now manages 80 billion transactions and maintains the world’s largest medical procedure, pharmaceutical and billing database used for Malpractice Insurance —empowering the data science team to build and manage hundreds of attributes covering over 80% of all US physicians and licensed medical professionals. The outputs from this data and advanced analytics reveal valuable insights and streamline the information collection process. With deeper risk awareness, better coverage and pricing becomes possible, promoting accurate and swifter decisions.

Automation technology can be used in various ways in an MPL context, from automating renewal and underwriting decisions to enabling red flags for significant risks. By leveraging vast datasets about medical procedures, the MPL industry can use data-driven decisions to streamline processes and reduce costs. Just as important, these advanced analytics fuel end-to-end workflow automation to increase efficiency and profitability.

Automation 101: Leveraging data for the application process.

Let’s explore a core use case: using data to fill out applications automatically. Most carrier applications are eight to ten pages long, necessitating excessive manual input, often from the provider or agent. These inefficiencies result in repetitive questions, a higher probability of human error or incomplete data. Automating this data feed simplifies the process, reducing errors and saving valuable time and energy—resources providers don’t always have. Simplified applications boost conversion and renewal rates while accurately pre-populated forms lead to a better experience for agents, brokers, and insured individuals. 

MPL continues to face headwinds throughout 2023.

In January, the MPL Association published  Meeting Industry Challenges with Automation, where I cited AM Best’s gloomy year-end outlook for the MPL market. The US MPL outlook remains Negative; AM Best still sees four major issues threatening the MPL segment. The issues cited include:

  • Rising claim severity and the impact of social inflation
  • Potential for indirect pandemic-related claims
  • Ongoing pressures of depressed demand in the physician segment
  • Diminishing reserve redundancies

MPL insurers also have to address issues facing healthcare providers (staffing issues, potential deterioration in the quality of care due to labor and supply shortages, caregiver burnout, and overloaded hospitals) and issues inherent to insurance (rising inflation, higher reinsurance costs, and challenges to tort reform).

This outlook reflects ongoing depressed demand as many independent physicians retire or migrate to larger group networks and hospitals. Given these challenges, the MPL market could face another year of operating losses despite year-over-year rate increases, higher investment returns due to rising interest rates, and more restrictive coverage terms and conditions. AM Best expects underwriting losses to persist due to the long-term headwinds and the significant capacity available, particularly in the physician market, where new business opportunities are limited.

Successful MPL providers share three winning practices.

  1. Using capital effectively
  2. Staying close to insureds to adapt and offer value-added services
  3. Continuing to educate insureds on patient safety

What will distinguish the MPL winners in the next round?  As personal lines’ automation shows, those who start using data and analytics now are well on their way to enjoying the full benefits of workflow automation. 

As we’ve seen, MPL automation can help insurers make smarter decisions and improve outcomes. Data-fueled automation offers a range of possibilities for MPL insurers looking to streamline operations, reduce costs, and provide better service. Insurers can gain competitive advantages and create sustainable long-term value by utilizing workflow automation solutions.

Automation can help solve problems, uncover opportunities and increase profitability in the MPL sector. Now that insurers have access to a greater range of data assets, they can explore how to leverage automation best to draw meaningful insights from it. Ultimately, those businesses that take full advantage of this technology will gain an invaluable competitive edge. Leaders in the MPL industry need to understand the potential of data-driven automation and embrace its opportunities rather than shy away from this new technology. Moreover, they must plan to take full advantage of these technologies.

Interested? Let’s continue the conversation around automating your workflow.

Kind Regards,
Gene Boerger, President and Chief Operating Officer

615-982-7076 |