Tech Roundup - January 2024

Each month, Mployer collects and presents some of the most relevant and interesting technology-related information, insight, and examples we've encountered in the areas of insurance, workforce management, and employee benefits.

Insurance Telemetric Growing Pains

We have noted in the past some of the many reasons telemetrics are becoming more prevalent in the insurance industry, but two recent lawsuits highlight a couple of the more problematic issues being raised by the use of these technologies, which provide insurance companies with the ability to monitor and analyze the performance data of individual policyholders in order to better quantify risk and even prevent some of the potential negative outcomes being insured against.

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3 Potential Problems With Telemetrics In The Insurance Industry

• Better Data Won’t Work In Every Customer’s Favor: While theoretically, most policyholders who incorporate telemetric-device-monitoring into their business operations should see a benefit from risk prevention alone and lower premiums as a result, there are some high-risk policyholders whose risk profiles and claims history data may ultimately lead to a higher rate than anticipated.
• Negative Telemetric Data May Be Questioned: Among those policyholders whose telemetric performance is assessed as high-risk and leads to higher premiums as a result, some may question the accuracy or integrity of the data produced by the relevant telemetric devices. 
• Conflicts of Interest Should Be Avoided: While conflicts of interest between telemetric device creators and the insurance companies incorporating the output of those devices into risk and claims assessment processes should be minimized as a preemptive defense against policyholders who question the accuracy of those data and assessments, that defense alone is insufficient to avoid litigation.

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Both of the aforementioned lawsuits at issue involve Tesla drivers who saw their insurance premiums go up in response to data gathered from devices in their cars that assess driving performance including turning behaviors, braking behaviors, and initiated collision warnings. 

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Going forward in the near term, insurers and policyholders alike would both be wise to consider the implications that potential alignment of interests between telemetric device makers and insurers may have on the propensity of policyholders to take legal action. 

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All parties involved would also be wise to be thoroughly aware of the sensitivity of these devices as well as how various data ranges will affect premium expenses with as much specificity as possible.

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Insurance AI Goes To Court

United Health is facing a potential class action lawsuit alleging that they are utilizing an artificial intelligence program that denies claims on faulty grounds, which has resulted in multiple deaths, including those of the plaintiffs whose estates are leading this suit.

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The core of this case involves nH Predict, which is an AI platform that UnitedHealth has been developing through a subsidiary and using since the fall of 2019.

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The primary complaint alleged by the plaintiffs is that United Health overly relies on nH Predict system output that significantly underestimate the amount of post-acute care or recovery-related therapy that patients will need following a traumatic illness and/or injury.

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Plaintiffs argue that the system doesn’t take into account various factors that should be included among decision-making criteria, such as patient comorbidities and external factors like whether or not a patient caught a virus or infection while receiving care at a medical facility. 

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According to independent research, when complaint denials have been challenged - whether through internal appeals or via administrative courts - around 90% have been reversed, which plaintiffs believe shows that the system doesn’t work and that UnitedHealth is therefore knowingly benefiting from the improper denial of claims that should be covered.

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Although the defense has yet to make their case, the path on which this case proceeds and finds ultimate resolution could potentially have serious implications for how AI will be used in the insurance space going forward.