Can Artificial Intelligence (AI) Reduce Risks and Costs?
On May 2, 2016 Charlie Munger of Berkshire Hathaway commented, “I like the idea of artificial intelligence because there is so little of the real thing.” While this comment is strikingly humorous in our world of one liner headlines and communication, will AI produce the promise of outstanding results for the risk management field?
Recently, the Wall Street Journal has written a series of Big Data and Compliance articles describing the power and uses of data in the world today. The latest WSJ article chronicles the various uses of AI in the field of compliance risk management. Compliance managers describe the potential for cost savings as the programs are becoming more mature.
Also, Business Insurance reported that a law firm has employed AI to complete natural language searches to return relevant answers for their lawyers, cutting time-consuming research and unnecessary billable hours.
As the parts of the Risk Management world begin to embrace AI, we are also beginning to integrate AI code into various Enterprise Risk Management (ERM) and Claim Settlement RiskPro® processes. The code is allowing us gather the most recent public and private information for the benefit of our clients programs and cases. We then focus the research for cost saving action at each stage of the work so that our clients can be assured the best program and case outcomes.
For example, if a client is utilizing our predictive claim model for catastrophic cases, and a new occurrence triggers the model for our work, our analysts are utilizing our AI capabilities for immediate comparative research to gain a “best outcomes” risk cost reduction approach to the claim. Thereafter, a plan can be established for resolution of the case in the shortest possible timeframe.
The preliminary results from the current efforts are exciting. During the test period of the past five months, we have seen 10-20% allocated cost and damage savings from AI-coded casualty, health and disability claims. Over the next several months we will be expanding the effort to the remainder of our offerings. Hopefully by the early part of 2017, we will be in a position to integrate the code into our Total Cost of Risk (TCOR) application.
We hope the AI movement will continue to grow in prominence within the Risk Management industry, and eventually evolve to help practitioners manage the “real thing”. Stay tuned!