With losses subject to insurance claims, generally 90 to 95% are immediately settled, rather than requiring negotiation or resulting in litigation. What about that other 5 to 10% of claims including motor vehicle accidents, slip-and-fall cases, workers compensation, medical malpractice, business damages and wrongful termination of employment?
That's where Optimalex presents U.S. insurance carriers with a value proposition for AI-based predictive analytics decision support tools. "We're not aiming at changing the business of insurance," says Frank Giaoui, the company's founder. "We are aiming at changing the process of claim management and the process of settlement or litigation, and of course optimizing that."
The idea for Optimalex grew out of Giaoui's research on legal settlements for a doctorate in law, earned after 25 years of career experience in the business world, including mergers and acquisitions work. "We incorporated the principles and the algorithm that I developed during my PhD dissertation, to focus on hard-to-quantify damages," he says. "We consider anything that is in the future or difficult to quantify and not easy to compensate." That means issues such as pain and suffering or loss of enjoyment of life.
Optimalex offers AGATHA, a SaaS platform that uses predictive analytics to estimate case outcomes and how much in damages is likely to be recovered. The company also operates NOAH, a data extraction and management platform. Optimalex's goal, according to Giaoui, is to determine a fair and objective settlement value, based in part on previous settlements and litigation.
"By putting science into the art of claim management, [users] can adjust settlement," says Gaioui. "You don't want to give settlement values that are completely far-fetched. You need to give the fair amount. You can speed up the process of settlement by showing that you are providing objective settlement, objective values, a quality objective."
For example, if an accident victim is pursuing $1 million in compensation for pain and suffering, Optimalex's AGATHA platform might indicate that a $600,000 settlement is reasonable based on a predictive analysis using data from similar past cases. The data would show, for instance, that only one-third of the time in similar cases did someone get that full $1 million in damages, and the other two-thirds of the time, litigation failed to win any damages at all.
"Once you initiate this virtuous circle, your client believes in you because you are using a third party of trust to quantify the settlement," says Giaoui. "Then you install a mindset which is completely different where the victims or the insureds would be fairly compensated consistently with a lower uncertainty."
Having started Optimalex in 2020, Giaoui says the goal is to build a track record of trust, by determining consistent, stable and certain figures for compensation settlements.
"Trust means clients who will buy more, clients who may buy this with less comparison of prices," he says. "This will install a virtuous circle of customer satisfaction and quality of service."
