Page 137 - July 2024 Issue 632

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How Liberty Specialty Markets uses technology for claims risk management?
– By Scott Kellers, Deputy Head of Claims/Head of London Claims at Liberty Specialty Markets

Insurance claims processing has undergone a substantial trans- point of claim, and the actuaries, underwriters and portfolio
formation with the integration of new technological solutions. From managers using this data later downstream, have been able
artificial intelligence (AI) to big data and automation, the insurance to provide a baseline for the understanding of claims with
industry is witnessing a rapid evolution towards faster, more effi- more granularity. Via this cross-regional and cross-functional
cient and transparent claims handling. review, handlers from all four regions of Liberty can look at
With the advent of technology, the role of a claims handler has the causes of loss, which they capture at the point of claim
rapidly evolved. To keep up, they need to embrace digital tools to and then enhance the options available to them to develop
provide the best experience for their customers. For the last few more granular stories about the cause of loss. To expedite
years, the industry has been intensely focused on developing two these historic clean-ups, Large Language Models have been
key areas. Firstly, they are working to streamline the value chain employed. This means that documentation for up to 20 years’
through technological integration, encompassing setup and tech worth of closed claims can be reviewed to detail the COL,
finance, and secondly, using data and analytics to measure the providing a new, more granular version of the claims story.
speed of claims processing, as well as obtaining real-time insights From “trend”, Liberty can begin to move into the arena of “pre-
to enhance overall business operations. These processes, estab- dictive”. And thanks to artificial intelligence and BOTs, the
lished correctly, will ensure that claims processing sees an overall foundational cleanup can be done more quickly and with a
increase in end-to-end efficiency. These transitions cannot take place in isolation – the higher degree of consistency. As a result of this claims review at Liberty, the options or
ease of transition is intertwined with the insurance sector’s collaboration with the financial granularity available to handlers has increased and Liberty is retrospectively redeter-
industry. As the technology continues to evolve, staying ahead of the adoption curve will mining the COLs on closed claims, which enables a retelling of the stories provided to
be paramount for insurers looking to provide a superior claims experience to their clients. internal customers to analyze trends that have not previously been understood. All insur-
No doubt that data and analytics are integral components in measuring the speed ers capture and record the story of their claims in different way, using different names,
of claims processing. The ability to access and analyze data in real-time means but the data collected is basically the same. The differentiator for what Liberty has aimed
that insurers can manage funds more effectively, ensuring that there are sufficient to create is the granularity and consistency that has been embedded for its Risk
resources on the balance sheet to meet claims obligations promptly. Technology Avoidance insights. Of course, insurers have opportunities to learn from cumulative
also aids in loss fund management, allowing claims to be paid promptly after an claims experiences collected by the Lloyd’s market and other industry bodies such as
event occurs. In addition, the integration of AI into claims processing has brought the Lloyd’s Market Association (LMA). The industry must also expand opportunities
about significant advancements in the industry. AI systems can analyze the vast available to bring data quality and consistency to shared risks and claims histories for
amounts of data embedded in the claims process, streamline processes through the benefit of insureds – in a similar vein to the LMA Cause Codes or Lloyd’s catastro-
automating basic functions and complete repetitive tasks in seconds, leading to phe codes.
faster response times and less reliance on and constraint by human capacity. Faster, more efficient and transparent claims handling will be created when indi-
For successful real-time analysis and awareness of emerging risks and trends, a vidual companies embrace the advanced technologies that are now available,
consistent and high-quality foundational data set is required. To that end, Liberty while industry associations must continue to help analyze claims trends with their
Specialty Markets has been conducting cross-regional and cross-functional high-level viewpoints. The future claims handler is no longer confined to tradi-
reviews of the 25 loss code groups available to claims handlers. By collectively tional practices but now can be at the forefront of integrating AI, digital tools, and
reviewing cause of loss codes (COLs), both the handlers capturing the data at the advanced analytics.

137 AL BA Y AN ECONOMIC MAG - ISSUE 632 - JULY 2024