Datamonitor estimates that, by 2005, there will be more than one million personal injury claims a year in the UK - an increase of around 33%. With 10.4 million accidents per year, its research proposes around 1.7 million could potentially result in a personal injury claim, brought because the injury may be wholly or partly attributed to a third party. To successfully manage this increasing number of claims, insurers must take a proactive approach to the multiple dimensions of their personal injury claims business, including case management from day one, return to work and rehabilitation planning and reserving.

Previously, insurance companies have only had the systems and resources in place to be proactive with larger claims. However, with the increasing exposure to personal injury claims, insurers now need to take steps to identify opportunities to be proactive on all claims, whatever their size, instead of focusing on aspects such as general damages on mature claims. The ability to do this is predicated on understanding the severity and recovery implications of the injury.

Unfortunately, until now, the level of knowledge of medical, common law and occupational factors required to do this has not been readily available to allow claims handlers to fully understand the injury and identify opportunities for early intervention and manage the eventual outcome of the claim.

Research has identified rehabilitation as a crucial factor in managing claims more effectively, with only 10% of people in the UK returning to work following serious injury, compared to 30% in the US and 50% in Scandinavia. Getting people back to work following a serious injury is in everybody's interest - it reduces the cost burden for insurance companies and provides injured parties with opportunities for physiotherapy, occupational therapy, counselling and other treatments. Providing treatment at the earliest opportunity rather than waiting until the claim has been stabilised increases the chances of successful treatment and the best outcome for all parties - surely a moral obligation for insurers and the medical professional alike.

A new approach - understanding the injury through an object-based model of the human body - is the industry's first claims management solution to manage the multiple dimensions of personal injury claims portfolios: Claims Outcome Adviser (COA). Today, producers of computer-animated feature films use powerful software to calculate the movement of a single hair on a character's head - COA works in a similar way, dealing with every case individually rather than treating generic case types. Using a model of the human body, it calculates the recovery implications and potential costs of thousands of combinations of injuries and occupations - a level of functionality equipping claims handlers to control the claim from first notice of loss.

COA has been developed to understand the severity and recovery implications of more than 20,000 medical conditions - including injuries, complications, pre-existing conditions and treatments - as well as 14,000 occupations. Once the injury is understood, COA can help apply this to understand and quantify the severity and recovery implications of the injury and its likely development. Equipped with this information, the claims handler can determine opportunities for rehabilitation, early intervention at the beginning of the claim life cycle and the eventual return to work.

How the object-based approach works

  • The object-based model of the human body contains the most extensive, detailed model of the human body yet built for this purpose, covering the musculo-skeletal system, organs and systems. These include the familiar physical body parts such as the neck, some internal components such as the circulatory system and functional body parts like memory, station and gait (the ability to stand and walk).
  • The model distinguishes between different ages and sex. It also understands the effects of any number of pre-existing conditions, such as obesity and diabetes, on recovery.
  • Upon receiving information relating to a pre-existing condition, injury, treatment or complication, COA applies details of this event to the relevant body parts at the lowest appropriate level of detail. For example, a skull fracture will affect the physical body part of the skull, as well as making the patient feel unwell. Although the skull injury itself may not stop the patient working or carrying out daily activities, the feeling of being unwell that accompanies the injury certainly will.
  • Having applied the injury to the lowest level of detail, the model understands the effect on a micro level as well as the wider implications for the injury.

    Knowing the effect of the injury

  • The model takes and applies any number of injuries to any number of body parts.
  • Predictions are then made regarding the recovery, or otherwise, of each of the body parts (both micro and macro-level) affected by the event.
  • Once all information relating directly to the injury is entered by the claims handler, COA incorporates information relating individual prognoses from medical experts. The prognosis information can be medically or occupationally-based.
  • COA takes the information from the prognosis and adjusts its body part recovery predictions accordingly. This process is important because it ensures the recovery progress is precisely matched to the injured individual. The result of this process is a comprehensive model of the human body, with a concise prediction of the recovery (or non-recovery) of each body part. The object-based approach is theoretically identical to the process used by humans to predict these outcomes, but of course to a far higher degree of complexity.
  • David Smart is business development director at Insurance Services Office (ISO).