Imagine walking into your favorite local diner. The staff greets you by name, remembers your usual order, and makes you feel right at home. Now, picture that experience replaced with kiosks and robots. Sure, it’s efficient—but something important is missing.
That’s the crossroads many insurers face today. As AI and automation become the norm in claims processing, the challenge is clear: how do we make systems faster and smarter without losing the personal touch that makes customers feel cared for?
It’s not about choosing between people and technology—it’s about combining both to deliver the best experience possible.
We’re Investing More in Tech—but Satisfaction Is Slipping
Insurers have spent billions modernizing their claims systems, hoping to make processes faster and more seamless. Yet according to J.D. Power, customer satisfaction with claims has fallen to a seven-year low.
Why? Because speed and convenience aren’t everything. When someone files a claim, they’re often going through a difficult time. They want empathy and understanding—not just efficiency.
Claims Are Expensive—and Always Will Be
AI in insurance claims handling is the biggest expense for property and casualty insurers. In 2020, around 70% of collected premiums went to claim payouts and related costs. That hasn’t changed much.
With so much money on the line, improving efficiency makes sense. But it can’t come at the expense of service quality or customer relationships.
Bad Data = Big Costs
Even the best systems and most experienced professionals can be derailed by bad data. MIT Sloan estimates that poor data quality costs companies 15% to 25% of their revenue. For a $10 billion insurer, that’s as much as $2.5 billion lost each year.
Faulty data leads to pricing errors, flawed decisions, and higher risk exposure. It also hurts trust—especially when customers are denied claims because of technical errors or outdated info.
Claims Experience Is a Dealbreaker for Many Customers
Today’s insurance buyers are doing their homework. Deloitte found that 44% of consumers look into an insurer’s claims track record before purchasing a policy.
That means AI in insurance claims handling isn’t just a back-office function anymore. It’s a major driver of brand perception—and a key factor in whether customers choose to stay or switch.
The Claims Role Is Evolving, Not Disappearing
As automation takes over routine tasks like documentation and simple approvals, claims professionals are stepping into more meaningful roles. They’re now focusing on complex cases, analyzing trends, identifying fraud, and guiding customers through sensitive situations.
Rather than replacing people, technology is helping them focus on where they add the most value: judgment, empathy, and problem-solving.
When Human Touch Makes All the Difference
Not all claims can—or should—be automated. Here are a few real-world examples:
Personal Injury Cases: Insurer Aviva uses a hybrid approach, leaning on automation for routine steps but switching to human support when empathy is needed—especially for injury-related claims.
High Net-Worth Clients: At Criterion, which handles complex claims for affluent clients, Managing Director Helena Evans emphasizes that strong communication and responsiveness are just as important as technical skills.
Avoiding Legal Trouble: Lawyer Patrick Sodoro points out that a lack of personal interaction in claims handling often leads to disputes and lawsuits. Talking directly with customers helps avoid misunderstandings and keeps issues from escalating.
Tech Should Support People—Not Replace Them
There’s no doubt that AI and automation are transforming insurance for the better. They reduce paperwork, speed up resolutions, and cut costs. But at the end of the day, customers still want to talk to real people—especially when they’re stressed, upset, or uncertain.
As one Chief Claims Officer put it: “Automation saves time and money, but it doesn’t mean we stop talking to customers. Especially when things go wrong, that human connection really matters.”
Take natural disasters, for example. Drones can assess damage, but only people can comfort policyholders and guide them through what comes next.
Final Thoughts: People + Technology = Better Claims
Technology will keep pushing the industry forward—but it can’t replace compassion, experience, and trust. The real opportunity lies in combining both.
AI can handle the routine. People should handle the moments that matter. Together, they can create a claims experience that’s not only fast and efficient, but also personal and supportive—just the way customers want it.
