AI reduces costs for most expensive types of workers' comp claims
Review how AI can tackle the three reasons why injured workers seek legal representation.
Artificial intelligence can help reduce the legal involvement in lost-time workers’ comp claims by as much as 15%, which in turn can reduce costs for these claims by as much as 5%, according to a study of more than 200,000 claims by Gradient AI.
Those savings equate to about $3.5 million, annually, based on the study’s insurers averaging $70 million in lost-time claims. On a per-claim basis, avoiding a lawyer can save $38,000, Gradient reported.
AI can achieve this by assessing claims complexity, predicting the likelihood of legal involvement and providing early warnings about the severity of an injury or changes in a claim’s status, according to the company. Early warnings allow for timely and proactive action by claims managers.
Gradient reported that lost-time workers’ comp claims that involve lawyers cost three times more and take twice as long as those that don’t need any legal intervention.
Why injured workers hire lawyers
An erosion of trust is one of the key factors that drive injured workers to hire a lawyer, according to Gradient, which noted that prolonged open claims are one of the quickest ways a carrier can lose a claimant’s trust. AI can mitigate this by speeding up the claims process.
When faced with severe injuries or doubts about their ability to recover, injured workers will often seek legal counsel. AI reduces the chance of this happening by giving carriers the ability to proactively address these types of concerns early in the claims process.
AI also gives insurance companies the ability to act earlier in those instances where a claimant is determined to file a lawsuit.
“This research unveils how AI insights empower insurers to take proactive measures,” Jeff Snider, general manager of property & casualty at Gradient AI, said in a release. “As an attorney, I recognize the importance of minimizing the cost of legal involvement. This study demonstrates how AI’s predictions provide adjusters with an early warning, enabling them to significantly mitigate legal involvement.”
Related: