It’s all in the mind…analytically speaking

During the festive break I found myself tiring of the endless diet of traditional Christmas TV and needed to stimulate my brain with a more challenging task in order to make it ‘work-ready’ once again.

So, despite protestations from my good wife, I opened my laptop and one of the first emails that caught my attention was the delivery of the Insurance Times Fraud Report for 2014. Now normally when I receive these I only have time to flick through and look for any golden nuggets of information, whilst simultaneously looking to see if fellow colleague James Heath has finally updated his PR mugshot, but this year was different. I read it all. And I’m glad I did.

The report overall gives a holistic view from a number of angles and is a good read so first and foremost I would like to thank Insurance Times as it took my attention for a period of time that was indeed very welcome! Yes a number of the things in the report are not new to those who work in some capacity in the counter-fraud arena, however sometimes it is nice to just take a macro rather than micro look at the world you live in.

Now there are quite a few bits in the report that I feel are worthy of comment and I am sure over the course of the coming weeks I will write another blog or two with some of the additional things that particularly interest me, such as the tools, the IFR, the shifting battle ground and of course the Bureau’s move beyond motor. For now though I am particularly moved to comment on the growing concern of psychological claims piece – based on the solicitors survey (page 32 of the report).

Before I get into this immediately however, anyone who knows me will know that I have a passion for data. When used properly, good data and statistics can inform the decisions we make on claims and my belief is that those who make best and appropriate use of data will invariably do better than those that do not. Interpretation however is the key to this, not just looking at the bare numbers and acting on those but taking the time to dig behind them and it is this principle that leads me nicely into the solicitors survey…

So, what did I get from this particular article? My interpretation of the article was that the survey of solicitors thought that psychological claims had been underestimated in the industry. The finger seemed to be pointed at claims management firms diminishing the art of traditional claimant legal advice, taking advantage of the fact that reforms were inadequate in this sphere both those in place now and pending (e.g. medical panels).

Now the figures quoted as percentages that support this article do not in themselves alarm (as perhaps they should) and this is the problem with using stats represented as a percentage since they can be taken as bare numbers. The ABI said that psych claims were present in 2% of whiplash, neck and back injury claims. An increase from 1% to 2% would not normally provoke a ‘call to action’ for many people and even if that figure was 4% as suggested by MASS, the alert would not flicker red, merely amber…So is this the right way to represent what is seen by the industry as a growing menace and of equal concern to whiplash? Probably not.

So, what figures would make sense to get a call to action? In my view, figures that represented and reinforced the perception that the survey actually taps into and indeed infers. I am pretty sure that readers would get significant value from figures that show the percentage of claims that had psych injuries presented by individual claimant firms/claims management entities. In particular to see how hypothetically a volume claimant firm increased the frequency of psych claims from 4% to 24% within the space of say a year. After all, examples of these sorts of increases from larger claimant organisations are likely to contribute more to the increase in overall psych frequency rather than interpreting the numbers as a general uptick across the entire claims base. As I said before, the key to data is interpretation.

Indeed, perhaps if as an industry we were also a little more laissez-faire about it all, the monthly MOJ portal statistics present an opportunity to deliver much more useful granularity of data, particularly surrounding claimant organisations and their propensity for psych claims. For example, I do wonder if the medical panel reform would work better if this level of analysis and transparency was also available to provide the accompanying data analysis.

Following on from my thoughts on the numbers, I also concluded that the headline of the article was perhaps off-mark. Somewhat bold in stating “Psychological claims growth vexes law firms”.

I’m not sure it does at all vex us.

Seeing logical sense through the eyes of the claimant fraternity would probably cure any doubt as to what is driving psych claims. Claimant organisations have always had a dual ambition, 1) to represent their claimant and 2) to make money. Psychological injury basically ticks both boxes, more damages for the claimant, more revenue for the claimant organisation, particularly the ones that are tied-into ownership or associations with other professional enablers. Ironically, by also adapting claims processes to screen for psych injury (and on the basic premise that you improve what you measure so frequency will, almost by default, go up) the claimant organisation also perhaps helps tick their professional insurances compliance box to guard against any potential under-compensation claims from claimants.

Finally, it should also of course not be lost on the industry that we all share a duty to get the balance right between compensation for the genuinely injured and declining the less than genuine. This then leads me to a concluding basic analogy.

I recently acquired two puppies and training them is a matter of trial (forgive the pun) and error. I have seen a potential correlation between some in the claimant fraternity and my puppies. The more I inadvertently reward new and emerging bad behaviour with tasty treats, the more I see the behaviour repeated and ultimately the more mess I have to clear up later down the line.

Perhaps therefore the growth in suspect psychological injury frequency requires the intervention of the ‘Dog Whisperer’ in order to restore a balance to claims life…