AI and RPA in Insurance

AI in Insurance

Are your adjustors still guessing the reserve amount for claims? Are your reserves impacting your ability to manage profitability? Do you have claims reserves that escalate by surprise? Accuracy in your reserve management impacts your rates, surplus adequacy, and profitability.

Establishing proper case reserves in insurance is a fundamental obligation of the claims department. The adequacy, redundancy, and deficiency of these reserves directly affect an insurance company’s rates, surplus adequacy, and profitability.

With insurance companies operating at an average of 50 percent loss ratio or above, they need to pay very close attention to reserve management. Redundant claims reserves can bloat a loss ratio, and understated claims reserves can depress a loss ratio, meaning that the loss ratio is insufficient. Both can be injurious to an insurance company.

Within an insurance company, reserve management is the obligation of both the claims adjusters and the management staff. Case reserves are usually estimated based on judgment and experience of the adjuster. For example, property damage reserves are characteristically based on a fixed amount, such as a repair appraisal or some other documentation that supports the amount of the damage.

The judgement and experience of each adjuster can vary a great deal. The problem is that it’s based on the experience and judgement of the claims adjuster that can vary a great deal. Some companies have implemented analytics systems to help ballpark estimate a claim, but the information that makes the claim amount vary wildly are not part of the data a traditional analytics system is capable of evaluating. The mention of a leg injury buried in the police report has a statistical probability of being significant to the claim amount, but analytics systems cannot read a police report.

ReserveAI with IBM Watson AI can. It can read through all of the documentation and decipher “arm injury” from “arm rest” to identify the items that cause claims to explode. ReserveAI gives claims management the ability to consistently and systematically evaluate claims reserves with the ability to learn as it works.

ReserveAI learns from your claims settlement past, building its library of actual claims payments from your payment history. It then uses that knowledge to identify like characteristics of a new claim to estimate the amount of reserve to apply. This is tantamount having a highly trained adjuster focused on reserve management with all of the knowledge of every claim ever processed by your company.

ReserveAI will make your reserve management more accurate, less time consuming, more automated and less subjective. Reach out to the Dayhuff Group today to see a demo or join us at www.dayhuffgroup.com/reserveAI

The Dayhuff Group, LLC.

Phone: +1 614-854-9999

Email: sales@dayhuffgroup.com

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