Claims Handling Tops List for Human-AI Integration in Insurance Industry

Claims Handling: The Top Focus for Human-Led AI Integration in Insurance

Claims handling stands out as the prime area for AI integration in the insurance industry. Over two-thirds of insurance professionals pinpoint it as the key business function to benefit from AI augmentation. The main advantages they anticipate include faster processing, cost savings, and enhanced fraud detection.

This insight comes from recent surveys commissioned by insurance technology provider RDT, gathering views from insurers and MGAs between October 2024 and January 2025. The goal was to understand the industry’s stance on AI's benefits, challenges, and adoption hurdles, as well as firms’ progress in embedding AI solutions.

Strong Confidence in AI’s Role

Industry optimism about AI is high. About 34% of respondents are very confident AI will benefit both customers and brokers, with another 40% expressing confidence. Only 26% remain neutral or less confident. This belief aligns with the importance placed on digital transformation: 53% consider it extremely important and 26% important for maintaining competitiveness.

Yet, digital transformation is still underway. Just 13% report their firms have completed it, and only 6% expect to finish within a year. A quarter foresee completion within three years, while over half anticipate it will take longer.

Claims Handling Leads AI Adoption Areas

When asked which parts of the insurance value chain could benefit most from collaboration and AI, claims handling topped the list at 67%. Other areas cited include:

• Fraud detection (60%)
• Underwriting (47%)
• Customer engagement (40%)
• Policy administration (27%)

The expected benefits of AI in claims handling are clear:

• 81% foresee faster claims processing
• 69% predict cost reductions
• 63% expect improved fraud detection
• 56% anticipate better data accuracy
• 38% believe customer satisfaction will improve

Claims Professionals Back AI Integration

A targeted survey of claims handlers showed strong support for AI-assisted workflows. An impressive 86% believe automation will enhance customer experience by delivering quicker and more accurate claims resolutions.

Specific benefits highlighted include:

• 81% feel positive about time savings
• 74% agree that automating repetitive tasks frees them to focus on complex decisions
• 67% are confident automation can resolve current motor claims processing issues

Automation is already in place to some degree, with 62% reporting partial automation of claims processes. However, only 9% say their claims handling is fully automated, and 27% have minimal or no automation.

Balancing Technology with the Human Touch

Concerns around AI adoption focus mainly on the human element. Between 40% and 50% of respondents worry about over-reliance on technology, losing control of decisions, diminishing the personal touch in customer interactions, and job security.

Maintaining human oversight is essential. A striking 92% stress its importance for handling exceptions and vulnerable customers. This highlights that successful claims automation combines AI efficiency with human expertise.

For insurance professionals looking to deepen their AI knowledge, exploring focused training on AI and automation can be valuable. Resources like automation courses offer practical skills to support AI adoption in claims and beyond.

RDT will soon launch a new survey on claims automation in partnership with Insurance Times. Participants will gain free access to the full report upon its release at the end of summer 2025.