Automation requires emotional intelligence to deal with large loss claims handling

October 12, 2020 / 5 min read

Over the past decade there has been an ever-increasing number of AI-driven solutions entering the claims area of the insurance market – often claimed to provide a tailored customer experience and faster settlements through automated interactions and virtual claims adjusters. But as Mark Hewitt, Director – Verisk Claims UK explains, more nuanced solutions are required in the context of the large loss and catastrophic injury claims space – where the goal is to provide a user with a set of tools to make an informed ‘emotionally intelligent’ decision, rather than the system making decisions for them.

His article is based on a series of presentations at Verisk Vision 2020.

lee-campbell-6njoEbtarec-unsplash

There is no denying that AI is a key focus area in the insurance sector – McKinsey predicts AI to have a seismic impact on all areas of the industry by 2030, from distribution and underwriting to pricing and claims. This AI momentum, it believes, will be driven by four developments in technology: an explosion of data from connected devices, the prevalence of physical robotics, open-source data ecosystems, and advances in cognitive technologies.

These driving forces will, without a doubt, extend into large loss and catastrophic personal injury claims processing. At first glance, with the increasing prevalence of AI, it may seem that the goal is to remove the claims handlers from the process altogether. But this, I believe, will not be the case. The most recent AI solutions augment the claims handler’s job, providing them with access to tools and resources quickly, but ultimately leaving the final decision-making process to the emotionally-equipped user.

Large loss claims have room for improvement

This emotional intelligence is best applied to extremely manual processes such as large loss claims handling. In this area, almost all cases are complex situations, with claimants suffering serious or life-changing injuries with considerable ongoing health requirements stretching over many years.

The damages awarded to claimants often also involve high legal costs, meaning a considerable amount of time must be dedicated to each claim. This is a classic example of where a computer is best equipped to gather and interpret vast quantities of data, but the claims handler can apply the emotional context to a particular claim scenario – then work directly with a claimant’s legal team to reach the best possible health and financial outcomes for the affected individual.

High value equals high emotions

The large value of a serious or catastrophic injury claim often impacts how it is approached by both the policyholder and claims handler. Multi-million-pound settlement figures and the impact of life-changing injuries add significant emotion on behalf of the claimant.

On the other side of the coin, some claims adjusters often approach these scenarios with more caution than lower value claims. For example, the presence of a liability or negligence factor in a claims scenario can drive a behaviour where an adjuster would act differently than if they were dealing with a lower value claim.

AI technology can ease the load on lawyers and claim adjusters

The vastly differing case circumstances between large loss claims is a key reason why a blanket algorithm cannot be used to categorically distinguish an outcome on a per-case basis. The most important factor in each large loss case is the claimant – and particularly the need to come to an emotionally intelligent resolution that best suits the claimant, be that rehabilitation strategies, back to work plans, or to improve their quality of life going forward.

The right technology should play a more supplementary role in collating key information, contributing to a positive outcome for every unique case. This is where AI solutions offer significant time and cost savings on the manual processes traditionally associated with these claims, often carried out by entire teams of experienced claims handlers and serious injury lawyers, requiring huge amounts of preparation.

Technology should pick up some of this resource-intensive ‘legwork’ such as comprehensively reading medical records and picking out key points. Digital solutions should also promote collaboration between insurers and a claimant’s legal team – delivering significant time and cost savings usually spent on the back and forth interactions over the phone or via letter. If further required as a decision-support tool, AI solutions can finally provide a comprehensive summary of similar cases to inform, rather than lead a decision.

A culture of AI acceptance looks promising

Qualitative feedback from experienced claims handlers involved in large loss and catastrophic injury claims is that they are open to AI involvement, but only in a way that allows them to find a better outcome for claimants.

Thankfully research from Accenture seems to mirror this, with recent stats in its ‘Technology Vision 2019 for Insurance’ indicating employees in the sector are keen to work with AI. 62 percent of employees believe intelligent technologies will create opportunities for their work and, 67 percent feel it will be important to learn new skills to work with AI.

Emotional intelligence at the core of every large loss claim

Insurers are looking at the opportunities to introduce AI technology to automate some processes in large loss and catastrophic injury claims without losing the human touch required to navigate extremely emotional and unique circumstances around each case.

This is a highly complex area of insurance claims, and one that can be streamlined by AI and automation, but this is an area which absolutely needs the emotional intelligence that is brought to claims resolution by the handler and insurer. This human perspective is vital to ensure the right outcome is being delivered for the claimant – not simply deploying a bizarre algorithm that outputs a simple figure for what are very complex and nuanced cases.