We have commented before on the use of Artificial Intelligence (AI) in processing claims (you can read that article here). Now comes news of the development of new litigation prediction models for insurers which are intended to remove some of the uncertainty from dispute resolution.
This system is being developed with the resolution of high volume insurance claims in mind since it is easier to develop statistical models and predictive AI for this type of business. Nonetheless, these models are also expected to have an application for high value complex claims.
This new technology is intended to be helpful in assessing both the chances of success in defending claims and the likely quantum of successful claims and potential costs issues.
There are a number of projects of this nature across the market reflecting cooperation between lawyers, technology providers, statisticians and academics. While they will certainly face a number of technological, mathematical and regulatory challenges (for example in relation to GDPR and laws aimed at countering discrimination) these models represent part of the continuing drive to increase claims efficiency, reduce costs and eliminate frictional damage in the processing and settlement of claims. Without these changes, the threat to traditional insurance models will undoubtedly continue to increase.