Applied Analytics Isn’t Just for Insurers. Startups Help Claimants Get In On the Action.

By | April 9, 2021

“It seems in dog park etiquette, the winning dog has to provide insurance or payments to the losing dog,” Fogle said.

Fogle had worked 27 years in insurance technology, so he had a pretty good idea how much his claim was worth. But he was frustrated by the glacial pace of the process, the claims adjuster’s refusal to return telephone calls and his attorney’s 40% cut from the $15,000 settlement.

There had to be a better way.

About two years after the dog park incident, Fogle founded Injury Claims Express, a company that makes software that uses data to estimate the value of a potential plaintiff’s claim. He said his patented system offers a solution to people who seek compensation from insurers for minor injuries and would rather not—or cannot—hire an attorney.

Fogle is not the only entrepreneur who is bringing applied analytics to the people. Justpoint, a company launched by healthcare technologist Victor Bornstein, allows victims of medical mistakes to document the particulars of their injury and find an attorney with matching qualifications and experience.

The two entrepreneurs are turning the tables on the insurance industry by employing data analytics as a means of pricing claims — but for the claimant. Both men say their products will also benefit insurers by managing expectations of potential plaintiffs who sometimes make overly optimistic assumptions about what their claims are worth.

“Every Joe out there on the street thinks they won the lottery,” Fogle said. “They have an unmanaged expectation.”

Injury Claims Express is Fogle’s second go at launching a data analytics product in the claims space. In 2001, he founded Claims Outcome Advisor, which produces software that estimates the value of bodily injury claims. Fogle said his company created the Book of Quantum for the Republic of Ireland. The document offers guidelines to determine appropriate compensation to plaintiffs with bodily injury claims. He sold the company to Verisk shortly after its launch.

Fogle said consumers who use ICE must agree to pay his company 3% of any settlement amount up to a maximum of $500 — far less than the typical attorney contingency fee. He said the app allows potential claimants to attach medical bills and other relevant documents and stores the information in a file that can be accessed by the claims adjuster assigned to the claim.

Users can negotiate with the claims adjuster directly using the app. But even if the adjuster refuses to accept an invitation to log onto ICE, the system is useful because it allows claimants to document their claims, estimate the value and keep records of relevant medical bills, Fogle said.

The app even notifies the carrier of early settlement opportunities, such as when the claimant reaches maximum medical improvement. ICE also suggests reasonable settlement amounts based on the nature of the injury and the degree of disability or disfigurement. Medical providers can also enter data into the system.

Fogle said about 3 million people are injured in accidents in the U.S. each year. About 50% of them hire an attorney, even though 96% of those injuries are not severe. He said claimants who make unreasonable demands delay settlement by persuading the insurer to dig its heels in.

With ICE, claimants can ask for a settlement that reflects what insurers have paid to persons who suffered similar injuries.

“The PDF we create for the claimant is basically your demand letter,” he said.

A personal experience also influenced Victor Bornstein’s decision to launch Justpoint, the app that helps malpractice victims find a lawyer to represent them. Bornstein said his own mother was injured because of a medical error when he was a boy growing up in Brazil. Although was only 7 at the time, Bornstein said he still remembers that his mother was in a coma for two weeks and nearly died because of the error.

Bornstein said Justpoint’s customers are at the lowest point in their life. He said the app can help them by aligning their expectations with reality.

Justpoint gives consumers an estimate as to what their malpractice claim is worth. The app also taps in a database of information about 900 plaintiff law firms to find professionals with a record of success and relevant experience, Bornstein said.

Bornstein said often people who are injured by a medical error are unable to find an attorney because the perceived value of the claim is too low. In some states, for example, health providers cannot be held liable for non-economic damages. Oftentimes, the statute of limitations has passed.

“We are going to tell them the truth, regardless of whether they have a claim or not,” he said.

Bornstein said he first marketed the proposed technology to insurers. He said his system can be of great help claims professionals by informing them aboutpotential damages. He said the inefficiency of the professional liability line is “frightening.”

“Most of the money is being spent is not on the claims,” he said. “In malpractice, most of the cost is in claims processing and underwriting.”

Harry Langenberg, founder of Optima Tax Relief, and Vivek Garipalli, founder of Clover Health, were among investors who provided $1 million in seed funding to Justpoint last fall.

But Bornstein has changed strategy since then because he found insurers moved too slowly. In a second funding round now underway, he’s seeking investors in the litigation-funding space.

Justpoint is still in the “pre-revenue” stage, but Bornstein said he intends to negotiate finder fees with the attorneys who take referrals from the system.

Bornstein said health care providers can also benefit from his app. The company has learned a great deal about medical mistakes, he said. He said his research discovered two claims against the same doctor at the same hospital who made the same error both times. He also found two allegations of sexual abuse against minors by the same staffer at a Florida hospital.

“My goal is to work with hospitals to prevent these incidents from happening,” he said.

Martin Ellingsworth, an analyst for Celent, said the services being offered by Injury Claims Express and Justpoint seem like a natural next step in the evolution of applied analytics. He said jury verdict research has been around about as long as court proceedings have been published.

“When you have a number that needs to be generated, there are frequently two sides — often three or four — with an opinion about what the number should be.”

Ellingsworth said analytics can provide value to consumers as well as insurers. “Advanced analytics isn’t just for e-discovery and forensic audit, it can help consumers understand the value of their claim so they can make informed decisions,” he said.

Data also creates opportunities. Years ago, Ellingsworth wrote a program that analyzes unstructured data held in written narratives within claim files to find subrogation possibilities. The same program can be extended to detect potential fraud.

Ellingsworth said Paradigm Outcomes’ business was built on data: The firm has a deep understanding of what it costs to treat people with catastrophic injuries, so it can accept a flat fee from workers’ compensation insurers to take over the care of seriously injured workers, speeding recovering by dispatching “swarms” of specialists.

Similarly, Ellingsworth said installing video cameras in commercial trucks can help insurers avoid the cost of litigating a claim that should be quickly settled, or showing that the truck driver was not at fault.

“That’s good for everybody,” he said. “It reduces the expense of arguing, for example. I don’t see a downside to having the facts because it takes all the expense out of it.”

Topics Carriers InsurTech Startups

About Jim Sams

Sams is editor of ClaimsJournal.com, the online resource and daily newsletter for property/casualty insurance claims professionals. ClaimsJournal is a member of the Wells Media Group. Sams can be reached at jsams@wellsmedia.com More from Jim Sams

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