Heather Wilson is the CEO at CLARA Analytics, a leading AI-driven claims intelligence platform, providing augmented intelligence for carriers and self-insured organizations. Heather was interviewed by Chris Luiz, Director of Solutions Architecture and Customer Success at Monitaur and Cleveland Founder at InsurTech Ohio.
What are some of the major issues you're seeing in the industry today?
“I believe people still talk a lot about social inflation. I think this issue will continue to be a threat with litigation financing and the advancement of plaintiff attorneys using AI. Especially in liability lines (with auto in general), which is really painful for the carriers and the self-insured because of their traditional approach to settlement negotiations. Their litigation strategy must be rethought.
The data silos we have across the insurance value chain are still an issue. It's a time where underwriting and claims need to come together. It's always been no fault of anyone, but rather how the industry has grown up. We have systems that might not speak to each other and are not architected the right way to be able to provide a feedback loop between underwriting, pricing and examination of what happens in the annual review for that policy.
We are still seeing social inflation stemming from exorbitant medical and litigation costs. Chief Claims Officers are trying to find the needle in the haystack when looking at the loss costs and examining where they may be able to get a lift whether it's looking at indemnity costs or medical costs. People are also trying to figure out how to avoid litigation altogether. How do we try to settle earlier and understand that certain claims coming in should just end in a settlement? So, you have the claims shop trying to get control of some of those pain points around their expense base. Plus you've got the underwriting side that would really like to have more of a heads-up on some of these issues.
We know that many of these claims expenses are not really around the high-frequency claims but around the low frequency and high-severity claims. So, how do you make sure from a reserving perspective that both sides are alerted of it, and the underwriting officer is doing the best that they can with rates? I see the industry starting to come together on having more of a warning, a prediction and a propensity lens to what's happening to any claims associated with policyholders as they go through examination and review cycles.
Plaintiff law firms are continuing to invest quite a bit in Gen AI. With consideration of that, we're trying to make sure that our models can detect where there's any type of Gen AI being applied, especially to legal demand packages that have medical records, and some legal documentation in there that needs to be brought even more to the forefront.”
How does CLARA Analytics help carriers address those issues?
“There are a couple of ways that we are helping carriers and self-insureds. One way we’re doing that is that we triage our cases daily. We closely monitor any delta or variances happening in the file. We're in front of the case and making sure we can point out any type of propensity or turbulence in the case before it happens. We're alerting the claims handler that something is happening and providing explainability of the different routes they could take based on the propensity our models are detecting.
Our models have been studying bodily injury cases across workers' comp, auto and general liability for 12 years. There's always a case that comes in with our clients that we've seen before. We have great accuracy in predicting the potential outcome of these cases. Where we're helping with this is not only triaging on a daily basis, but if there's a propensity for litigation, we’re also making sure that there are options to inform your negotiation strategy. You might decide to settle earlier, and we give you settlement ranges based on previous cases.
The second way we’re helping is by giving you the best defense panels for negotiation strategy if it ends up in litigation. For starters, we have one of the largest contributory databases of bodily injury cases over the last 12 years. We have scoring engines of defense panels and plaintiff law firms. We really help our carriers and self-insured find the right negotiation strategy with the defense panel by giving them a history of head-to-head cases that these lawyers have experienced. Lastly, the biggest asset we have developed by examining millions of claims is our specialized claims doc intelligence solution. What I mean by that is we are using Gen AI in a matter of minutes to analyze, summarize, sort and index thousands of legal demand packages, which contain medical records and legal nomenclature. We produce insights and surface the sub-conditions and legal documents that need to be understood around limits or bad faith for adjusters in a matter of seconds.
We want the adjuster to have job satisfaction which is certainly difficult if they have to pour through hundreds of pages of legal documents on a daily basis. We want them to think of our system as a second set of eyes, helping them go through a lot of documents. We want to give them back efficiency and allow them to bring their experience into the file once our ‘Claims Doc IntelPro’ is surfacing information that they then can put into their workflow.”
What are your customers seeing as far as ROI of AI-driven processes?
“Return of Investment (ROI) is what we lead. Within the first year, we return 5-10 times back to our customers. We're trying to shave two to five percent off their loss costs, and we deliver on that. There are different ways we deliver. We have metrics per product. For example, it could be that we have lessened attorney involvement, meaning we've brought down your attorney fees and litigation costs because you've either settled for less outside of court or you've gone to court and received the right defense pane. We also bring down medical expenses by helping to direct care to the best providers. Beyond loss cost reductions, we enable operational cost savings by eliminating medical document review time by over 80 percent.”
How is the current technology environment changing how you think about your product offerings at CLARA Analytics?
“We have architected a platform of broad services. Our two platforms – the Claims Guidance platform and the Claims Document Intelligence platform – are architected together but are also built to go to market separately. Our SaaS platform operates as a headless app, so carriers and self-insured have the flexibility to bring insights from other areas into one single-user interface or integrate with a core system. You can turn on particular functions as you need them. This functionality is greatly important right now because many carriers and self-insured are either upgrading their core system to a new one or upgrading to a cloud system.
Clients are also starting to think about what’s next from an integration play. Architecting a strategy to work with many insurtechs versus partnering with services platforms with broad capabilities. As they do so, we can work with them on integration or build more adjacency on their platform.
In this market, it's always been a ‘buy’ versus a ‘build’ dilemma. However, we talk about adding partnership to the mix. The ‘buy’ and the ‘partnership’ approaches can work together when you work with companies that provide you a platform that can integrate easily. That's the beauty of having a SaaS subscription platform; you can grow together, especially as we find the way to correctly apply Gen AI. Not only should you ensure that you have accuracy out of the box, but you also want to provide even more configuration and customization to grow dynamically. That's why I believe that broad services are important.
We also think a lot about industry regulation. We ensure our models are unbiased, stay non-prescriptive, use objective data and do not bring any liability for ourselves or our potential customers. We think about our models, data and platform and work with our clients to land with them in the right way with the ability to grow with them.”
What else should we be looking for from CLARA over the next 12 months?
“We're going to grow and expand with our clients. As our clients look at additional liability lines, we will produce models to help them avoid trending issues. You'll see us continue to enter new lines with our clients. You'll continue to see us go deeper into our functionality on Claims Document Intelligence Pro as our clients ask us to add functionality and provide more intricate data on what they need to see.
You'll continue to see us encourage carriers and self-insured to come together as a consortium against plaintiff law firms that are getting the litigation funding. That's why we encourage learning from each other with our contributory database. By combining forces for better insights, we will be able to combat the aggressive tactics used by plaintiff attorneys.”