Q&A: Enhancing Analytics with AI
Machine learning, large language models, and AI are having an impact on analytics. Case in point: Heather H. Wilson, CEO of CLARA Analytics, explains how her company is putting AI to work in the insurance industry.
- By Upside Staff
- July 11, 2024
Upside: As AI technology continues to evolve, we can expect to see even more advancements in its use. How is CLARA Analytics using AI to optimize insurance claims?
Heather H. Wilson: Insurance carriers are seeing losses rise due to both economic inflation and an increase in litigation activity. Traditionally, claims organizations have focused on the operational expense side of their operations and have not focused as much on the loss payouts. This was mainly due to a lack of data and technological processing power.
Traditional business intelligence solutions did not have the predictive power to make an impact early enough in the claim life cycle to limit losses. This has changed dramatically with the advent of machine learning and large language models (LLMs). We have the ability now to look across millions of claims to detect patterns, predict losses, and give claims adjusters guidance that can make a huge difference.
How exactly is CLARA Analytics using AI? How can insurers use AI throughout their business to optimize claims outcomes?
CLARA uses predictive and generative AI models to give claims professionals augmented intelligence to make data-informed decisions. For example, workers’ compensation adjusters can use our platform to find the best-performing doctors in the area to direct the injured worker to. This drives a win-win for both the injured worker and the carrier. The injured worker gets the best care available and returns to work faster. The carrier pays lower medical bills and the recovery time lowers the amount paid out in lost wages.
AI can be used from the beginning of a claim at first notice of loss. The severity of the claim can be predicted, the right adjuster can be assigned, and the claimant can get serviced faster. AI can then be used throughout the claim until final settlement. AI can search through millions of claims and find claim cohorts to help predict losses, attorney involvement, and even the likelihood of complications from an injury, such as an opioid addiction. With this intelligence, the adjuster can intervene, settle early, and get additional professionals involved to optimize care.
How has it automated, streamlined, or transformed the way insurance adjusters work? What benefits has it shown?
One of the best uses of AI in an insurance claim is with document intelligence. Our CLARA Optics product uses OCR and LLMs to read legal documents and medical records. We extract, summarize, and provide advanced insights to the adjuster. This eliminates hours of work and immediately highlights problematic legal language. The insurance carrier saves on its operational expenses and the claims outcomes will improve with AI-generated insights. In essence, the system acts as a senior adjuster working alongside the claims adjuster.
How have you balanced AI’s capabilities with the need to preserve human-centric roles?
We believe AI does not replace humans but augments their abilities. It is really important to recognize the role of empathy in the claim process. There is a lot of emotion when someone has an accident or has lost their property. Keeping the human in the loop helps with compliance, keeps claimants happy, and gives them the confidence that their claim will be fairly resolved.
Moving forward, in which areas of your business do you foresee AI making the most significant impact, and conversely, in which areas do you believe a human touch will remain indispensable?
AI will certainly make huge improvements in the sales, underwriting, and distribution areas of the insurance value chain, but claims is where we believe we will see the greatest impact. AI will uncover more fraud, improve customer experiences, train junior employees, and improve claim outcomes while still fairly compensating claimants. We have just started to scratch the surface.
Although AI will certainly streamline and automate many types of claims, it’s not likely that it will replace the human adjuster for bodily injury claims. There is too much at stake with an injured human being on the end of a claim that needs to be resolved. Every bodily injury claim is unique and requires a human touch for an optimal outcome.
[Editor’s note: Heather H. Wilson, chief executive officer of CLARA Analytics, has more than a decade of executive experience in data, analytics, and artificial intelligence, including as global head of innovation and advanced technology at Kaiser Permanente and chief data officer of AIG. She currently sits on Equifax’s board of directors. While at AIG, she was named the Insurance Woman of the Year by the Insurance Technology Association for her data innovation work. Wilson has been a steady supporter of diversity. She launched the Kaiser Permanente Women in Technology group, focused on mentorship and retention for women in math, technology, and science, and at AIG, she launched Global Women in Technology and served as executive sponsor of Girls Who Code. You can contact Wilson via LinkedIn.]