Scout InsurTech Spotlight with Sheila Dye

Sheila Dye is the COO of Latitude Subro, a service organization that focuses on financial recoveries for its clients. Sheila was interviewed by Michael Fiedel, Co-Founder at Scout InsurTech and Co-Founder at PolicyFly, Inc.

Sheila, how have AI-driven analytics and automation tools transformed the efficiency and accuracy of the subrogation process?

“There are several ways AI and automation tools have transformed subrogation. I’ll highlight three key areas, then touch on the overall benefits.

First, one of the most impactful advancements is AI’s ability to proactively identify subrogation potential at the First Notice of Loss (FNOL). When a claim first comes into a carrier, Artificial Intelligence can immediately detect potential subrogation and route the claim to a specialist—whether that's in-house or with a preferred partner. This not only speeds up recovery and cycle times but also enables early collection of critical elements like evidence, secure scenes and key witness statements. Instead of waiting 30 days for a claims associate to potentially recognize subrogation, you're on it from day one.

Second, platforms like Guidewire now support integrations that allow for secure, automated and touch-free subrogation referrals. For example, if AI flags subrogation potential at FNOL, an API can automatically trigger a referral within the secure internal system—boosting both efficiency and accuracy.

Third is the power of AI-powered bots. These bots can process massive volumes of claim documents, identify key ones and extract critical information. This dramatically reduces processing time and improves accuracy. It also allows subrogation specialists to focus on the more complex, knowledge-based aspects of claims rather than spending time on administrative tasks.

All in all, the benefits include faster cycle times, fewer missed opportunities (like securing time-sensitive evidence) and greater recovery potential for carriers.”

From an insurance carrier point of view, how can they strategically balance outsourcing subrogation while maintaining control over key recovery decisions?

“Strategic outsourcing allows carriers to scale without significantly increasing overhead. This enables them to reallocate internal staff to higher-impact areas, improving both customer service and operational performance.

For example, a carrier might maintain an in-house subrogation team but outsource portions of their caseload. During large-scale events—like the California wildfires—they can outsource all subrogation work, freeing up internal teams to assist with claims mitigation efforts. Outsourcing also provides flexibility during staffing shortages, such as medical leaves or peak vacation periods.

As for maintaining control, that’s where strong collaboration with service providers becomes critical. Carriers often set financial thresholds or other key levers that trigger communication and decision checkpoints. These controls ensure alignment on recovery strategies and expenses, and they keep not just the carrier but also clients and brokers in the loop on critical decisions like settlement negotiations or recovery investments.”

Focusing on insurance carriers, how can they maximize subrogation as a strategic revenue driver while ensuring compliance with evolving regulations?

“This is where AI is especially helpful. You can train AI models to recognize jurisdictional nuances—not just the policyholder's state, but also where the loss occurred. Different states have different regulatory requirements, and AI can either flag these situations or automate timely communications that are legally required throughout the claim and subrogation lifecycle.

This streamlining allows specialists to focus more on outcomes and less on compliance-related administrative tasks. Artificial Intelligence ensures communication and documentation are timely and accurate, helping carriers stay compliant while still focusing on revenue recovery.”

What are the biggest challenges and benefits of implementing automated subrogation workflows across different carriers?

“One major challenge is the lack of internal resources. Developing AI solutions is costly, and not all carriers have the expertise to build or implement them correctly. There's also a need to ensure compliance with internal risk policies and external regulations—and to maintain the AI models over time to prevent ‘drift’ where performance degrades.

Another challenge is inconsistent or outdated internal processes. Many carriers still use manual workflows or antiquated systems, making it hard to effectively layer AI on top and extract real value.

Finally, there are legal complexities. Some states have very specific regulations that make implementing AI difficult without risking non-compliance. Navigating these complexities requires careful planning and robust governance.”

How does networking with industry peers and organizations contribute to innovation and continuous improvement in subrogation strategy?

“Engaging with others in the field is critical for driving innovation. If you're working in isolation, you might miss out on new ideas or creative uses of AI. But when you connect with peers—inside and outside of insurance—you get inspired by how others are leveraging AI, which can spark ideas for your own organization.

For instance, I’m involved with Scout InsurTech and Ohio State’s Fisher College of Business, where I get to see real-world examples of AI in action. These experiences are powerful—they show what's possible and give you ideas for practical use cases. Plus, they create opportunities to troubleshoot challenges and collaborate with others on solutions. It’s that cross-pollination of ideas that really drives continuous improvement.”

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