Oded Israeli
CMO at Five Sigma
Oded brings extensive marketing experience and a proven track record in strategy, product, and operations across large enterprises and fast-growing startups. His expertise in AI technology positions him as a prominent thought leader and Gen-AI evangelist in the industry.
15 MINUTE READ
In the last few years, the business world has witnessed an extraordinary revolution – the wide availability and adoption of GenerativeAI (Gen-AI) technologies, transforming industries and redefining possibilities. Breakthroughs in Gen-AI, natural language processing, and multimodal models have enabled machines to perform tasks once considered uniquely human. From understanding and generating complex texts to creating realistic images and videos, Gen AI’s capabilities expand dramatically every week.
This surge in innovation has also brought AI into everyday operations, making business processes smarter, faster, and more efficient. The insurance industry at large, and specifically the claims management function are no exception, as Gen-AI opens the door to unprecedented levels of automation, productivity, personalization, and cost savings.
Insurance Claims: The Perfect Arena for Generative AI
In 2024, the insurance claims management sector is ripe for the AI revolution. Claims handling involves a complex blend of manual processes, abundance of textual and visual data, communication across different media, and a lot of decision-making. All of these tasks can benefit tremendously from AI. From First Notice of Loss (FNOL) to claim settlement, the journey of claims handling is riddled with opportunities for reasoning, automation, and optimization.
Boards of Directors around the world are demanding that their organizations adopt AI, not sure exactly where and how, but confident in its magical ability to improve current practices. Chief Claims Officers, in turn, are searching for ways to embrace AI technologies, preferably where Gen AI can help them achieve their business objectives: to tackle inefficiencies, reduce Loss Adjustment Expenses (LAE), and improve cycle times.
When done right, Gen-AI can tackle these challenges head-on, opening new avenues for effectiveness and better employee and customer experiences.
But then they hit a wall: their current claims management systems (CMS) can’t do AI. Sure, the vendors are full of promises, issuing statements about a bright future—years away. What they seem to overlook is that the Gen-AI revolution began 2 years ago, in November 2022, and that companies like Five Sigma have already turned that vision into reality – today.
Let me share with you what I’ve witnessed in the insurance industry over the past year, including key takeaways from ITC Las Vegas, where many vendors showcased their AI aspirations and vision.
Point Solutions for AI in Claims Handling
Everybody knows AI is a thing. The market is flooded with young entrepreneurs and startups, and a few scaleups, that develop AI point solutions for claims management.
But point solutions are AI tools designed to tackle one or two specific tasks—That’s it. Examples include cool AI tools for visual damage assessment after a fire or car crash, OCR tools paired with Gen-AI to scan, analyze, and summarize documents, and Gen-AI chatbots for First Notice of Loss (FNOL) reporting.
These tools are undeniably impressive and a massive improvement over legacy systems (or humans) that dealt with such tasks. However, they are inherently limited, and deploying them across an insurance operation comes with substantial challenges. To integrate AI point solutions into claims management effectively, insurers face a series of complex and resource-intensive obstacles.
The 5 Challenges of Integrating Point Solutions into the Claims Management Operation
Clearing Compliance and Security Hurdles
Smaller startups often struggle to get approval from large insurers’ IT and legal departments because of strict regulatory standards. For those that manage to pass, the next hurdle awaits.
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Integration with Existing Systems
Connecting new tools to legacy systems is costly and time-consuming. While startups may offer budget-friendly quick integration, legacy system vendors often require expensive change requests, warn of risks, and claim they’re already working on a similar solution—delaying progress. But even if the insurer decides to integrate external point solutions, the next challenge awaits.
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Combining Multiple Tools into Workflows
Individual tools need to work together, but workflows are rarely straightforward. Dependencies between systems add complexity, making it challenging to create a cohesive process. But even after workflows are successfully established, there’s still another step to tackle.
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Training Adjusters on the Tools
Adjusters must learn how to use each separate tool effectively—where to access it, how to input and interpret data, and who to contact for support. This extensive training takes time and resources. Even with a trained workforce, the challenges don’t end there.
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Managing a Spaghetti Architecture
After implementation, the result is a fragmented spaghetti-like architecture of systems, claims data, and workflows that are more complex to understand and operate in, harder to measure and attribute results and benefits to, and prone to compatibility issues whenever a vendor updates their software. Instead of streamlining operations, this setup creates inefficiencies and a reliance that hinder progress.
Good Luck.
Without a unified, automated view, insurance companies risk pouring significant time and money into solutions that ultimately create more problems than they solve. More often, insurers simply opt to avoid progress altogether – missing out on the transformative benefits AI has to offer.
A Unified AI Solution for Claims Management
At Five Sigma, we’ve seen this hesitation before. Nearly a decade ago, many insurers resisted moving to the Cloud, only to realize later that they had no choice but to adapt—and quickly. With Gen-AI, the pace of progress is exponentially faster.
Claims adjusters and team leaders aren’t waiting for management approval; many are among OpenAI’s 300+ million ChatGPT users. They don’t use a secure enterprise account but an unsecured, generic AI tools that understand very little about insurance, don’t care about a specific company’s confidential Standard Operating Procedure (SOP), and occasionally hallucinate (fabricate information) as new AI models do.
That’s why we developed Clive™, the insurance industry’s first AI Claims Adjuster. This is where this blog gets self-promotional, but you want to continue reading to see why Clive is earning awards and excitement from insurers, reinsurers, MGAs, and TPAs alike.
Clive™: The AI Multitool of Claims Management
Clive isn’t just another AI point-solution; he’s a comprehensive AI product that manages claims with the precision and reliability of a seasoned, loyal claims adjuster. Clive does it all—analyzing claims, guiding human adjusters with actionable recommendations, and, most importantly, executing tasks to move claims forward efficiently.
Claims adjusters are the quarterbacks of the claims process, juggling a wide range of responsibilities: data entry, coverage checks, triage, reserves, exposures, communications, third-party matching, negotiations, settlement, and resolution.
Rather than creating a separate point solution for each task, we’ve built an AI adjuster capable of orchestrating the entire process. Much like a Swiss-Army-Knife, Clive packs multi-functional capabilities in a quick-to-deploy and easy-to-use friendly interface. You might buy it for one purpose, but keep discovering how useful it is for many other purposes over time.
Clive’s core functionalities
What can Clive do? Quite a lot actually.
Analysis: Clive evaluates claims with AI precision, providing data-driven insights. He responds to incoming data to dynamically analyze the claim at any point of time.
Planning: Clive generates step by step action items that need to be followed (by him or a human adjuster) in order to advance the claims process in an effective manner, given his expertise in adjusting insurance claims and the insurer’s specific SOP.
Chat: Human adjusters and team leaders (as well as reinsurers) can speak with Clive freely on a friendly chat interface. Clive knows all details about the claim and provides immediate answers to any query. Clive also resonates his responses for understanding and compliance.
Execution: This is Clive’s unique advantage over other co-pilot chatbots. Clive doesn’t just talk the talk, he walks the walk! Clive automates various claims tasks (like data entry at FNOL), lets adjusters choose whether they want him to execute a recommended next step in the claim handling plan, and drives speed and accuracy across the claims management process.
Quality Assurance and Inspection: Clive can also look over any claim handled by human adjusters and ensure quality in the claim handling. Clive catches errors, compares the actions taken to the SOP, and saves QA and compliance time and costs. This also reduces the insurers’ risk of human errors and regulatory fines.
Clive’s Advanced Automation
From initial FNOL to final settlement and claim resolution, Clive integrates Five Sigma’s industry expertise and insurers’ past data to automate repetitive or manual tasks, such as data entry, reserve calculations, and more.
Clive’s automation depends on the insurer’s permissions and SOP. He can autonomously handle many steps in the claim or make progress according to pre-determined configuration of the insurer.
AI with built-in Security and Compliance
Clive is built on Google Cloud Platform (GCP), ensuring enterprise-grade security and privacy. All customer data is encrypted and stays protected at every stage. GCP ensures that any customer data is never used to train Google’s AI models, and it remains within the insurer’s chosen region to meet privacy regulations.
Clive’s architectural design includes additional safeguards against security risks, such as hashing personal data before processing on underlying models and preventing certain content from being processed. Five Sigma is certified with SOC 2 Type 2 and works according to GDPR standards. Clive is therefore a secure and reliable service that helps adjusters work faster and better while staying compliant.
No Need to Replace Existing Systems
Saving the best for last – Clive adds AI capabilities and automation to any Claims Management System (CMS), not only Five Sigma’s! We use our robust API framework to integrate Clive to any existing claims management system (and other insurance systems for more automation magic) and then you can simply enjoy AI benefits without the need to change systems or wait forever.
I think you need to see it for yourself.
