Rising loss costs, particularly in litigated insurance claims, which is frequently called Social Inflation, is a significant risk for property and casualty insurers. Mitigation of that risk must focus on improving claim outcomes and successful insurance claim teams are constantly asking “how can we get better outcomes?”. Investments in training and talent, streamlining process and improving manager engagement are time tested strategies for improving outcomes. Insurance claim organizations have used technology to populate structured data fields, maintain the official claim file and manage workflow. In some cases, this use of technology adds value by improving efficiency or allowing for use of data in decision making but the technology use case is not specifically focused on impacting claim outcomes.
Claim Data Evaluation Technology – Focus On Things That Matter
While the percentage of claims in a category can vary by claim type, all claims can be placed in one of three categories. First, claims that are routine, not complex, likely to resolve quickly where the outcome will not change significantly regardless of the time and skill devoted to handling. These claims have a low risk of a bad outcome. Second, claims that are not likely to resolve quickly and will need to be properly handled to resolution but do not present a significant risk of a bad outcome. Third, claims that, if they are not timely and properly managed by the most skilled and experienced claim professionals, have a high risk of a bad outcome. The outcomes of claims in the third category matter. Those higher risk claims provided the greatest opportunity to mitigate the risk of Social Inflation and reduce loss costs. It has long been the strategy to find those claims that matter and make sure that the right people are proactively managing those claims to mitigate the risk.
Technology Can Consistently Improve Claim Outcomes
To improve outcomes, claims teams must rapidly, consistently: (1) locate the risk signals; (2) accurately evaluate those signals and (3) take action that makes a difference. Technology can substantially reduce associated with reviewing large volumes of data and inconsistent evaluation of that. Advances in Artificial Intelligence (AI), Large Language Models (LLM), Natural Language Processing (NLP) techniques make technology a faster and at least as accurate method for locating and evaluating the claim risk signals. Technology can accelerate the extraction of risk signals and deliver consistent evaluation of those signals. The claim professional can focus on taking action that improves outcomes.
Invest in New Technology To Improve Claim Outcomes
Front line claim professionals are asked to confront the risk of social inflation, to reduce loss costs and to improve claim outcomes every day. They need technology to unlock and focus the power of claim data to achieve these objectives. You cannot reasonably expect improved results unless you give frontline professionals the tools they will use. DocLens’ ClaimLens product is that tool.