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Tautona: sharing risk to create a faster claims process through AI

Some challenges in our market require bravery even to approach, and the automation of parts of the claims process is one such example. The benefits are huge – if AI can be used to analyse claims documents accurately, it becomes possible to approve the payment of claims to customers much faster. It’s an area where innovation could transform customer outcomes. However, the challenges are also big. 

The data pool for London market claims is very deep, and there are sometimes dozens of linked policy documents that must be analysed – previously always by a human claims handler – to understand the technicalities of a single claim. As a result, the automation of P&C claims checking was once thought to be impossible, and few firms were willing to even attempt it. But through the innovation focus of the Lab, the young AI firm Tautona was enabled to make the impossible real. 

Before entering the Lab, Tautona had already developed an early stage claims adjustment tool, designed to read each claim and its linked policy documents to produce a recommendation on whether a claim should be paid. The product was conceptually right, and already in use in other industries, as well as in consumer insurance. The challenge was to bring it into the P&C insurance market successfully.

During their time in the Lab, Tautona was matched with Atrium and they agreed to work on a pilot to automate Atrium’s delegated authority property claims for the US market. During the ten-week programme, they were together able to create a proof-of-concept model which showed how using the right AI could reduce costs and processing times while maintaining accuracy of results.

The claims tool that was subsequently rolled out has been trained on hundreds of thousands of claims and reads them as a human would, but more accurately and within seconds, instead of 2-3 hours. Tautona says that while human beings analyse claims at 95-96% accuracy, their system will deliver 98% accuracy.

For Tautona, the Lab was a fantastic learning experience and sharpened their focus. Previously, the team was focused on end-to-end claims validation. However, they found a ‘golden nugget’ in the Lab – P&C policy coverage analysis – where automation could deliver huge benefits in a big market.

The Lab also opened up the US market for Tautona, and the firm now works with carriers and TPAs in Canada and the US.

Having been in the Lab is a door opener for us. We are able to say who we have worked with and that brings so much trust straight away because they know we understand their world.
In this case, our job was to tackle a huge challenge and to take a step forward for the whole market. Claims automation has been a goal for many years, but insurers needed a market-wide programme to innovate in this area; which is, of course, what the Lab is designed to facilitate. In this case, everyone knew what we were trying to achieve was difficult and we collaborated to work at it together. This approach, along with the technology, absolutely delivered, and is a great demonstration of what can be achieved in an open innovation space.
Ed Gaze, Lloyd’s Lab manager