Reduce Your Total Cost of Risk with Gallagher Bassett's SMART Benchmarking

By: Joe Powell

Nov 11, 2024 — Relying solely on industry benchmarks to inform your claims management can mislead key strategic decisions. Most benchmarks rely on industry-specific comparisons, including vastly different exposures at the claim level, even in the same jurisdiction. Moreover, inaccurate information and data can have significant negative impacts on your claims programs and total cost of risk.

Gallagher Bassett's focused approach to benchmarking claim outcomes — Severity Mix Adjusted Rating Technique (SMART) — factors in variables such as accident type, jurisdiction, job class, and diagnosis to compare each client's individual claims to hundreds of others of similar complexity.

With the SMART Benchmarking Dashboard, available in our award-winning RMIS platform Luminos, our clients can interactively drill down into root causes of opportunities in real-time and across more than a dozen metrics. By effectively creating a 24/7 stewardship, SMART improves the accuracy of claim range, provides clarity into how to reduce the total cost of claims, delivers in-depth insights on year-over-year claim trends, and creates targeted recommendations on where to focus efforts on proactive program improvement.

Benefits of SMART Benchmarking include:

• Improves accuracy of claim range and helps to provide clarity into what can reduce the total cost of claims
• Delivers a systematic comparison based on dozens of claim characteristics to increase cost saving opportunity
• Reduces error rate of claim range by incorporating unique business details and claim characteristics
• Creates targeted recommendations on where to focus efforts for proactive program improvement
• Provides in-depth detail on year-over-year claim trends to help you make better, more informed decisions about your business
• Helps focus attention and time investment on claims that are most likely to have a severe business impact

For example, a client might find that their overall costs have increased in the past year. From there, they can quickly see the source of that cost by using the Opportunity Finder feature, which slices outcomes by business division, jurisdiction, accident type and source, industry, and even medical treatment quality. Each driver of opportunity is quantified relative to the SMART benchmark, allowing clients to easily prioritize which drivers to focus on to improve outcomes.

Industry-based benchmarks can lead to the wrong conclusions because they're less precise and don't account for individual claim complexity. SMART Benchmarking provides precise, claim-level comparisons to deliver greater clarity — including changes in complexity over time — and this depth of insight can lead to greater claims and risk management performance and significant cost savings.