HCF rolled out SPSS's Clementine in the middle of last year to cover four core components of its business operations: the identification of inappropriate practices, marketing, member behavior and member retention.
"We looked at a number of companies that specialized in predictive analytics before going with SPSS," HCF general manager of information management, Patrick Shearman said.
"We even looked at outsourcing to companies that do nothing but analytics, but chose SPSS because during our pilot stages, it worked excellently in-house."
The success of an in-house system was of vital importance for HCF, as the company deals with highly sensitive information when handling claims, Shearman said.
The SPSS system was integrated with HCF's existing claims processing software and infrastructure to allow real-time risk assessment from the backend and to help identify potentially fraudulent claims.
Shearman said this has enabled personnel to accelerate processing, identify fraudulent claims and settle low-risk claims quickly for customers.
Although Shearman said each aspect of the Clementine suite was equally important, addressing inappropriate practices was an ongoing exercise that HCF dealt with on a daily basis.
"Throughout the inappropriate practices process, we found financial benefits rested in ways we could recoup some of the money that was being claimed from us through the identification of fraudulent claims," he said.
However, Sherman was quick to stress that the solution did not provide a be-all end-all solution, but acted more as a "helping hand", a point that was reiterated by SPSS senior vice president of worldwide sales, John Shap.
"The thing that must always be kept in mind is that predictive analytics is never 100 percent right," Shap said. "What it does, is give you a better starting point for your decisions."
Although Shearman declined to disclose the specific revenue increases and savings the insurer made following the implementation, he said the ROI had been marginal. However, he claimed this was due to the existing efficiency of HCF's operations.
The initial deployment of Clementine cost HCF about A$500,000 (US$381,000). The required ongoing support, training and licensing costs amount to A$100,000 a year, Shearman said.