Overpayments and Settlement Calculation Errors in Claims Adjusting

Embedded settlement calculation errors and over-reserving propagate into Lloyd's syndicates’ actuarial estimates, causing 7-14% leakage on earned premium and capital inefficiency; for a $100M book this means roughly $7M–$14M annually in overstated losses and misallocated capital. • For a $100M premium carrier, settlement miscalculations, duplicate/erroneous payments, and systematic over-reserving during negotiation and authorization generate roughly 7–14% leakage, or about $7M–$14M per year in avoidable claim costs and distorted loss ratios. • For a $100M premium P&C carrier, 7-14% claims leakage driven by settlement miscalculations, duplicate medical payments, and premature settlements equates to approximately $7M–$14M per year in avoidable overpayments and excess reserves.

Adjusters and medical claims reviewers export bills and claim data from core claims systems to Excel to recompute totals, apply negotiated discounts, re-code items, and simulate settlement scenarios; they cross-check against PDFs and emails, rely on personal rules of thumb and memory for negotiation bands, and track offers/counter-offers in email threads or notes outside the core platform. • Analysts download large claim datasets into Excel or BI tools to reconcile case reserves and paid losses, performing ad hoc checks and pivots to spot anomalies; they often rely on personal heuristics and manual back-testing instead of systematic detection of miscalculated settlements or duplicate paid items. • Each specialist pulls data out of the core claims platform and rating tools, then re-builds the settlement math manually in emails, ad‑hoc Excel files, personal actuarial worksheets, and notes; they often re-key codes and amounts into the payment/authorization screens by hand and track negotiation moves and agreed figures in Outlook, WhatsApp, or notebooks.