Scott: System has significantly reduced litigation rates
Insurance specialist firm Horwich Farrelly has developed an automated system which uses artificial intelligence (AI) to help insurers identify potentially high-value personal injury claims in portals for low-value cases.
David Scott, head of innovation and client solutions, said the Manchester firm’s automated injury recognition (AIR) system had alerted insurers to around 300 portal cases which needed to be handled differently in its first year of operation.
Mr Scott said AIR operated behind the scenes to detect high-value claims in the Official Injury Claim (OIC) portal for cases worth up to £5,000 and the Ministry of Justice claims portal, which handles cases up to £25,000.
He said AIR used indicators such as key words and phrases to identify types of claim. The AI element related to “cognitive services” used to extract “large loss indicators” from documents automatically and accurately.
“The main issue for insurers is that they need to ensure that high-value cases are being handled by the right team.”
He said it was also crucial that insurers could apply the correct reserves to their cases and did not have to increase them.
AIR operates as part of Horwich Farrelly’s online litigation triage (HOLT) system, launched in 2019 with the aim of helping case handlers assess claims for fraud.
HOLT is provided free of charge to insurers on the basis that they are more likely to instruct the law firm when a case reaches litigation.
It is designed to help insurers assess quickly whether a claim can be paid or whether it requires further investigation.
Mr Scott said HOLT had “significantly reduced” litigation rates for the firm’s insurer clients, in some cases from 20-25% to 12-15%.
In its first year, AIR analysed thousands of claims that had been through HOLT, applying around 200 indicators to documents uploaded onto the portals, in particular the claim notification form.
The number of indicators had now been increased to over 700, which he predicted would “increase the number of hits” achieved by AIR.
Meanwhile, Horwich Farrelly has been assessing the first year of another tech tool, HOLLY, which uses text, email and chatbot technology to cut the time taken by drivers to provide signed statements about accidents electronically.
HOLLY was introduced last year to coincide with the launch of the OIC, which requires insurers to obtain statements from the drivers insured by them in certain situations.
The firm has estimated it has saved insurers almost £1m in costs which would otherwise have gone to enquiry agents, who charge from £150 to £250 for statements.
Ronan McCann, chief executive and managing partner of Horwich Farrelly, said HOLLY would help the insurance industry work through the backlog of personal injury claims that had built up since the launch of the OIC.
“Personal injury claims can turn on a witness statement and they are absolutely vital to the claims process. By enabling witnesses to effectively self-serve in a secure and compliant manner, we have taken a whole lot of friction out of the process.”