Effective risk management is an important factor in keeping insurance premiums and workers’ compensation claims in check. Yet, even with concerted effort, it’s no easy task to improve risk management. New advances in applied predictive analytics can help. In this two-part blog series, we’ll explore how and why you should invest time and resources into the use and analysis of predictive analytics—and then make changes based on the results.
What Are Predictive Analytics?
Predictive analytics applications use computer modeling designed to help predict future outcomes based on current choices. For some time, advanced and predictive analytics models have provided corporate leaders insight into the future of their business enterprises. Today, predictive analytics are branching out into the realm of safety professionals. If you specialize in corporate or industrial safety, you can now examine the possible outcomes of current safety choices.
Why Try Predictive Analytics to Improve Risk Management?
When you embed predictive analytics into your risk management equations, you can make better front-line decisions and direct attention appropriately to high-cost claims. Workplace accidents may also be predicted before they happen, thus greatly reducing your medical expenses.
The white paper “Predictive Analytics in Workplace Safety,” published by Predictive Solutions, encourages the use of predictive models, or leading indicators, over the use of existing safety data or lagging indicators. In other words, most existing data sets are based on the status quo. The predictive modeling offered by predictive analytics lets you examine future scenarios before you’re faced with the results of costly accidents.
Why Trust Predictive Analytics to Improve Risk Management?
The same Predictive Solutions publication reports that predictive modeling has produced accuracy levels between 80 percent and 97 percent in predicting future worksite injuries based on existing data. In addition, Risk & Insurance reports that the $12 billion Dallas-based Dean Foods Company reported “major success” in just one year of using predictive analytics to offset workers’ compensation claims.
Proactive safety inspections are better than reactive incident investigations. The use of predictive analytics introduces a corporate culture of safety and prevention. To use predictive analytics, you’ll build safety data collection procedures into daily operating procedures so that data mining occurs routinely and effortlessly—all while encouraging a climate of on-site safety. This results in organized, understandable data streams that are readily accessible to help you make important decisions regarding safety and workplace management.
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