Brave New World, Part I: Liability Insurance Carriers' Computer-based AI Claims Programs.
Fictional illustration of a ChatGPT-embossed computer chip inserted in an illuminated circuit board.
Brave New World: Addressing Liability Carriers’ Computerized AI Claims Adjusting/Modeling Programs Used to Evaluate Personal Injury Cases.
With apologies to Aldous Huxley, it’s a brave new world out there in plaintiff’s personal injury advocacy: liability insurance carriers use computer-based, artificial intelligence (“AI”) modeling programs to evaluate claims. There are numerous brands of injury valuation software in use by the liability insurance industry -- some legendary, some not well known. Regardless of what software program is used, personal injury claims are now routinely assessed and valued by computerized AI claims programs.
Just a few years ago it was relatively easy to look up and obtain on-line website information regarding these computer-based AI claims evaluation programs. Heck, some of those software providers even publicly advertised how their programs worked on their sales websites.
No more.
With the broad, very public recent rollout of and growing universal knowledge about “AI,” most of those insurance claims software companies have gone turtle -- pulling their heads in their shells, shutting down explanatory websites, literally going “dark” on the internet about their products.
Those claims programs were using early AI mechanics even then. AI tools are incredibly more robust now, and how powerful and accurate they have become is a matter of deep suspicion, the most secret of trade secrets. What do those injury claims programs measure? How many of the approximately 85,000 ICD-11 medical classification codes are included and used for injury claims review? How deep is the information analyzed? And for whose benefit? What is kept in, what is omitted from the algorithmic calculations?
To truly analyze this AI explosion in claims handling from outside the insurance industry looking in presents a frosted-glass puzzle. Software vendors are saying less -- or nothing -- about their AI-powered products. No insurance executive or adjustor is going to spill the beans while employed, and even if not currently employed, he or she would be subject to binding confidentiality and/or non-competition agreements.
So where can one go to learn more?
How about asking AI itself? Why not quiz the now-famous ChatGPT AI website about liability insurance AI-based claims software -- scraping the entire internet for all that can be gleaned about these critical software programs personal injury lawyers have to deal with every day now, on every claim?
So this series of blog entries will do just that, asking ChatGPT a series of questions regarding AI-based insurance industry injury claims management programs. How do they work? Who uses them? What’s the best approach to maximizing the insurance carrier’s reserve and settlement figures?
The answers to these questions from ChatGPT will be presented in a series of blog entries over the next several posts. CAVEAT: None of these responses from ChatGPT can be guaranteed to be absolutely accurate or correct. Remember, these responses are generated by artificial intelligence, subject to the inherent strengths and weaknesses of ChatGPT and what it scrapes from the web. That being said, the answers do provide some excellent insights gleaned via AI from the four corners of the internet about liability insurance AI-based claims management software and how it works.
So, with that caveat in mind, let’s go to the … uh, (mag) tape!
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The first question posed to ChatGPT about this issue is as follows (remember, all answers posted here are solely and completely posted from ChatGPT, without editing):
Question No. 1: DESCRIBE THE USE OF ARTIFICIAL INTELLIGENCE (“AI”) IN INSURANCCE LIABILITY CLAIMS HANDLING.
Answer No. 1 by ChatGPT: AI is increasingly being utilized in the insurance industry, particularly in the handling of liability claims. This technology offers several advantages, including increased efficiency, accuracy, and cost savings. Here are some of the key ways AI is used in insurance liability claims handling:
Automated Claims Processing: AI can automate various parts of the claims process, such as data collection, document verification, and initial assessment. Chatbots and virtual assistants can assist claimants in reporting incidents and gathering initial information.
Data Analysis and Risk Assessment: AI algorithms can analyze vast amounts of data, including historical claims, medical records, accident reports, and weather data, to assess the risk associated with a claim. This helps insurers make more informed decisions about claim settlements.
Fraud Detection: AI can be used to detect potentially fraudulent claims by identifying inconsistencies and anomalies in the data provided by claimants. This can save insurers a significant amount of money by preventing fraudulent payouts.
Image and Video Analysis: AI can analyze images and videos from accident scenes to assess damage, determine liability, and reconstruct accidents. This can expedite the claims process and reduce the need for on-site inspections.
Natural Language Processing (NLP): NLP algorithms can analyze textual information in claims documents, police reports, medical records, and other documents to extract key information and assess liability. This can significantly reduce the time and effort required to process claims.
Predictive Analytics: AI models can predict the likely outcome of a claim and estimate the potential cost, helping insurers allocate resources more effectively and make better-informed decisions.
Customer Service and Communication: Chatbots and virtual assistants can provide claimants with real-time updates on the status of their claims and answer common questions, improving customer service and satisfaction.
Claims Routing: AI can determine the appropriate claims adjuster or specialist to handle a particular claim based on the type of incident and complexity, ensuring that claims are assigned to the most qualified personnel.
Automation of Routine Tasks: AI can automate routine tasks in claims handling, such as sending notifications, reminders, and updates to claimants, as well as generating standard correspondence.
Workflow Optimization: AI can streamline the claims process by optimizing workflows and reducing manual data entry, which results in faster claims resolution and lower operational costs.
Customer Insights: AI can analyze customer data to provide insurers with insights into customer behaviors, preferences, and needs. This information can be used to tailor insurance products and services.
Regulatory Compliance: AI can assist in ensuring compliance with ever-changing insurance regulations by automating the tracking of new laws and regulations and adjusting claims processes accordingly.
By leveraging AI in these ways, insurance companies can expedite the claims handling process, reduce costs, enhance fraud detection, and provide a more satisfying experience for both claimants and policyholders. Additionally, AI allows insurers to make data-driven decisions and better manage their risk exposure.
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Thanks for that initial analysis, ChatGPT. All in your words, not ours.
Stay tuned to this Blog for Question No. 2!