Use Case 8: Early Litigation Propensity Detection

Overview: Detects litigation likelihood before attorney involvement by analyzing claims language and behavioral signals.

Litigation prediction claims highlight open and re-opened files that machine learning models identify as likely to enter litigation. By scoring these claims—using a configurable prediction algorithm—adjusters gain early visibility into cases that need immediate attention. This foresight helps teams intervene sooner, manage reserves proactively, and prevent avoidable escalation.

The Goal

To give adjusters early warning before a claim enters litigation and an attorney gets involved, allowing them to take proactive steps—such as enhanced communication, documentation review, or early negotiation—to reduce legal exposure, protect reserves, and prevent avoidable escalation into high-cost litigation.

Role

Claims Manager, Litigation Manager

Trigger

FNOL narratives, claimant behavior patterns

Opportunity

Intervene early to avoid escalation

Before Charlee

Litigation discovered post-attorney engagement

With Charlee

Early litigation risk scoring and alerts

Product Used: 4SeeCharlee, AskCharlee

Value Proposition

• The Charlee NLP platform Identifies open or re-opened claims that exhibit pre-litigation signals that help adjusters focus their attention on claims where the financial and reputational risk is the highest.
• Proactive Risk Visibility: Identifies open and re-opened claims showing early litigation signals so adjusters can immediately focus on files with the greatest financial and reputational risk.
• Early Intervention: Predictive insights help adjusters engage sooner—closing communication gaps, resolving disputes early, and reducing the chances of attorney involvement.
• Resource Prioritization: Ensures that senior adjusters, supervisors, and defense counsel concentrate their time on the claims most likely to escalate, improving efficiency and cost control.
• Improved Outcomes: Since litigated claims cost 3–5x more and take 4–6x longer to close, identifying risks early helps prevent escalation, manage severity, and avoid nuclear verdict exposure.
• Compliance & Preparedness: Creates a structured audit trail for high-risk claims, supporting stronger regulatory readiness and defensibility during reviews or external audits.
• Recommendations & Strategies: Compare prior strategies across customers’ claims or across Charlee’ repository for similar claims and outcomes.

Financial Impact

• Loss Ratio Impact: 2-3 pt reduction
• Leakage Avoided: $15K–$40K per litigated claim avoided
• Reserve Accuracy: 5–8% reserve accuracy improvement