Risk scoring applies a model or rule set to claim characteristics, producing a score indicating expected severity, litigation likelihood, or handling complexity. Scores route claims to appropriate handling tracks.
Models are built on historical claim data.
Alternative Names:
Claim Risk Score, Risk Rating
Why it Matters?
Scoring works well as triage and poorly as valuation. Identifying which newly reported claims warrant immediate senior attention is a task where population-level patterns are genuinely predictive, while projecting what a specific claim will cost depends on facts the model cannot see. The failure mode is treating a score as a reserve figure, which produces systematic error on the claims that deviate from the pattern.
Frequently Confused with
Related terms
Frequently asked questions
What is risk scoring good for?
What is the failure mode?
