While that human element will always remain important, there is only so much bandwidth thatan expert case manager can dedicate to each claim. That’s where AI technologyenters the picture, supplementingthat human experience with an always-on engine that scans new information, identifies potential high-risk claims, and recommends the steps most likely to lead to a positive outcome.
In recent years, P&C insurers have faced unacceptably high loss ratios driven by increasing claim costs and an explosion in so-called “mega claims.” Effective claims management is about controlling the denominator in that loss-ratio equation. When a company can do a better job of resolving cases successfully, that flows directly to the bottom line.
For years, the insurance industry has relied on data analytics to inform better underwriting decisions.Until now, though, relatively little attention has been paid to the idea ofusing data science to improve claims management. That’s not surprising, given the volume and variety of data that goes into each claim. Much of that information is unstructured. It shows up in the form of doctor’s handwritten notes, legal correspondence, and other documents that don’t easily lend themselves to traditional data analysis.
In this respect, AI and machine learning algorithms are game-changers. AI can scan all of the incoming information about a claim, determine its meaning, and compare it to a vast collection of other cases with similar attributes. AI can spot anomalies. It can learn which factors correlate to a potential escalation and bring that information to the attention of an experienced professional.
Effective claims management isn’t just about minimizing costs, though; it’s also an opportunity to steer cases toward the best possible outcome for claimants. AI is improving patient care by proactively matching patients with the individual healthcare providers who are most likely to produce positive results. That’s good for the insurer,but it’s even better for theclaimant who’s recovering from a serious injury.
CLARA Analytics has pioneered this application of AIto claims management, offering a complete set of tools for the commercial insurance industry. “We like to jokingly say that our products give adjusters the superpowers that allow them to do more things in a better, faster and effective way than they might be able to do on their own,” said Karin Golde, vice president of data science for CLARA Analytics.
CLARA’s software encompasses the full spectrum of claims management activities, providing a one-stop solution for adjusters. “CLARA’s applications are designed in a very simple and easy to understand way such that even the people who are not machine learning experts can use it very effectively to do their jobs,” added Golde.
We like to jokingly say that our products give adjusters the superpowers that allow them to do more things in a better, faster and effective way than they might be able to do on their own
CLARA’s state-of-the-art AI suite—CLARA Triage, CLARA Treatment and CLARA Litigation—improves profitability by helping insurers optimizetheir claims outcomes. CLARA Triage helps adjusters to isolate and track complex claims and to understand the factors driving cost. CLARA Treatment helps them identify the best healthcare provider for each claimant across specific provider networks, specialities and locations. CLARA Litigation alerts claims managers to potential litigation risks and helps them identify the attorneys who are most likely to resolve claims effectively. In short, CLARA’s products help insurers to make better decisions with data-driven recommendations.
CLARA’s clientele ranges from top- 25 carriers like Berkshire Hathaway Home state Companies and QBE to small, self-insured organizations. The common thread for all of CLARA’s clients is the same: AI delivers strong ROI.
Several years ago, leaders at QBE Insurance Group aligned around a strategic objective to make data analytics a priority. They saw an opportunity to eliminate manual processes and lighten caseloads for their claims management team. Each adjuster at QBE was handling approximately70-80 claims each day, which made it difficult to spot potentially problematic claims.
Leaders at QBE engaged CLARA to help solve this problem. The result of that engagement was an estimated 5x return on investment. David Bacon, general manager at QBE,saidthat number might be too conservative and that the actual ROI might be even higher. A mid-sized carrier that uses all three of CLARA’s current products saved over $16 million last year.