Charting the course for AI in claims: 6 key areas where insurers can find value

Navigating a new path

For decades, insurers have carried the unwelcome reputation of being technological laggards in the financial services sector.

Burdened by enormous, complex legacy systems that are costly to update, insurers have found it challenging to implement new technologies. Add that to cultures and regulations prioritizing strong, stable balance sheets over risky technology punts and insurers have often fallen behind adjacent industries in adopting innovation—or so the story goes.

Tom Helm, Global Head of Claims, Insurance Consulting and Technology at WTW, disagrees: “One of the main reasons legacy systems have hamstrung insurers is that they were one of the first industries to adopt mainframe computers, directly leading to an unfortunate era of monolithic systems. More recently, they have also been quick to adopt new technologies like cloud computing and continue to drive cloud adoption across the value chain.”

Tom argues this reputation is especially unfair when applied to claims functions.

Over the past two decades, claims operations have undergone significant evolution, shifting away from in-house mainframes, burdensome human-led decision-making, and inconsistent data capture toward more streamlined, digital-first processes. “Insurers are much more data-led today, much more focused on how analytics and AI can improve the efficiency and cost of their operation, while, at the same time, actually improving the customer experience.”

Scanning the horizon: what’s next for AI and claims innovation?

The integration of AI into the claims process offers insurers numerous benefits. By leveraging AI, insurers can transform their operations, delivering better outcomes for both their business and their customers. But insurers that are tempted to lag might well be targeted by fraudsters, or see their customers turn away due to relatively slow processing and decisioning.

The reality is that there are an enormous scope and breadth of claims AI applications, and part of the secret to successful AI deployment is in identifying and prioritizing effort, a topic we will continue to discuss.