AI AUGMENTS, NOT REPLACES, HUMAN EXPERIENCE IN CLAIMS MANAGEMENT – PART 1

At its very core, AI is all about intervening, replicating, amplifying, and improving human decision-making using technology or machines. In essence, AI can be applied to two main things;

• Simplify mundane repetitive tasks that can relieve humans to perform other important things over time.
• Intervene in roles that demand a remarkable ability to sweep data, synthesize relevant information, and make decisions autonomously.

In the claims process, for example, an insurer employs hundreds or thousands of claims handlers or analysts. On the surface, their job entails receiving claims filed by policyholders, reviewing them for red flags and referring them for further investigation if they appear suspicious, recommending them for closure if deserving, and assessing and segregating claims based on risks and reserves.

As we dig deeper into an analyst’s role in the claims management process, we realize that the tasks need more than just being ticked off a dashboard. Each step in the claims adjudication process needs rapid decision-making. This can only be accomplished by asking the right questions and probing intelligently, at the right time, during the right moment of the process, to collect all relevant information and apply it to make decisions. Some of these questions in an auto insurance claim for example can be;

• Does the insured’s policy cover that claimed loss?
• Is complete loss covered or only partially?
• Is the loss the insurance company’s responsibility, or can it be subrogated?
• Is there additional information that can be obtained from case notes that can influence the claim result, or is the policyholder required to be questioned to continue processing the claim?
• Does the claim seem suspicious, and is it coming from the policyholder’s mal-intention or a genuine case of possible misunderstanding of their policy?

Questions like these and the decision to ask and research more by claims adjusters come together during the First Notice of Loss or FNOL once the claim is filed. Therefore, depending on the situation, complexity of the case, and the type of insurance (auto claims are adjudicated differently from med-claims), there are tons of decisions to be made in a short period, quickly and thoughtfully during the first few hours of reporting a loss. When multiplied by thousands of claims handlers doing similar tasks across various insurance companies and lines, this showcases the intellectual capital going into making decisions during the mindboggling process, combined with humungous amounts of data constantly generated.