Set risk-acceptance thresholds before the pilot: What should governance require before approving the pilot?
Define acceptance thresholds before piloting so residual claim-delay risks can be judged consistently despite limited review capacity.
The question
An insurer wants to use an AI system to prioritize claims for human review. Vendor testing is incomplete, and managers disagree about acceptable error levels. The system could delay some legitimate claims, while the insurer has limited capacity for additional review. What should governance require before approving the pilot?
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- Set risk-acceptance thresholds before the pilot. ✓Predefined thresholds resolve disagreement, guide prioritization, and establish when residual claim-delay risk is unacceptable before testing begins.
- Require managers to review every claim until confidence improves.Universal manual review may exceed available capacity and avoids defining which residual risks justify approval or rejection.
- Use the vendor’s average error rate as the acceptance benchmark.A vendor average may not reflect this insurer’s context, affected claimants, or severe residual outcomes requiring explicit criteria.
- Approve a small pilot and define thresholds after observing results.Delayed criteria allow results to influence the standard and provide no prior basis for deciding whether observed residual risk is acceptable.
The trap
Look for criteria established before evidence arrives, especially when stakeholders disagree about acceptable residual risk. How to remember it
Define acceptance thresholds before piloting so residual claim-delay risks can be judged consistently despite limited review capacity.
How many of these would you get right?
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