Customers deserve better insurance claims — here’s how AI and automation can help

Mar 31, 2025 | min read

Andreza Pires

The insurance industry faces no shortage of challenges in today’s economy: More political instability, an uncertain economic outlook, supply chain disruptions, and increased regulatory burdens.

All of this disruption has an impact on customers. They expect speed and transparency yet feel frustrated by claims journeys that are arbitrary, unclear, or even result in harmful outcomes.

This situation presents an opportunity to shift to digital-first and consumer-centric approaches for claims processing. Tools like AI and automation can help streamline the claims processing process, all while reducing errors and protecting insurance companies from fraud. Of course, these tools need to be applied with a deft touch, as human judgment and customer personalisation still need to be a key presence in the customer’s claims journey.

Indeed, the shift away from bureaucratic and inefficient methods to more digital tools is already underway, with 54% of global insurers already implementing digital claims processing into their workflow. In order to stay competitive, all insurance companies should be looking at how to successfully integrate AI and automation into the claims process without sacrificing efficiency, compliance, or the need for the human touch.

Better outcomes in challenging times

It’s worth taking a closer look at some problems and challenges that the industry is up against, before we consider the solutions.

According to Gallagher Bassett, supply chain disruptions affect 62% of all global insurers’ claims resolution processes. These disruptions include the rise of fraudulent claims, which increases the burden on insurers; rising costs and shortages in the construction and auto repair sectors; shortages in skilled labor such as surveyors and mechanics, which can increase the time it takes to resolve claims; and outdated legacy systems that can’t keep up with the pace of claims.

In addition, the Consumer Duty rules imposed by the Financial Conduct Authority have added to the regulatory burden that insurers are obligated to meet. According to insurance trade group The ABI, “the core principle is that firms must act to deliver good outcomes for retail customers”. This puts the burden on insurance companies to work harder to protect vulnerable consumers from poor outcomes.

Finally the global political environment adds to the mix of challenges insurers are facing. Political unrest, rapidly changing trade policies and regulatory approaches, and a general sense of market uncertainty make business confidence and long-term planning difficult and add to claims inflation.

Amidst all of this, insurance companies have a difficult task: Any efforts to improve the customer claims process through digital automation, AI and data must simultaneously balance operational efficiency, regulatory compliance, and rising expectations for speed and transparency. And of course, maintain the human judgement and soft skills that are essential to better outcomes in complex situations.

Modernising and gaining efficiency

So how can AI and automation help insurance companies navigate this challenging matrix of factors? While supply chain issues and external constraints may still remain, legacy systems can worsen matters and increase delays even further. Modernising these systems and adopting new capabilities throughout the claims lifecycle is essential. AI and automation can offer things such as pattern recognition tools, risk simulation, fraud detection through advanced data analytics, automatic payouts, and built-in checks to ensure fairness in customer outcomes.

It’s helpful to look at what some of the leaders in the insurance space are already doing. For example, AXA is using AI and automation to streamline the claims process for its car and home insurance customers. These tools enhance automated decision-making and give policyholders the ability to initiate claims online at any time, not just during business hours. This massively improves the speed and efficiency of claims handling and results in happier claimants.

Aviva has also integrated these tools into its claims processing, leading to faster and more accurate claims – all of which increase customer satisfaction. It's done this largely through the adoption of a digital-first culture, where the company invested heavily in training and upskilling the workforce, boosting collaboration across departments, and getting leadership to commit to these changes long term. According to McKinsey, this resulted in a 65% reduction in customer complaints and a 23-day reduction in the average time needed to resolve complex cases.

AI and automation are incredibly useful in foreseeable, predictable, or typical claims and cases. They can speed up processes and reduce errors in these repeating scenarios. However, human judgement is still essential for claims that are complex, unusual, or deviate from the normal pattern. The key is to remember that these tools are most powerful when used in conjunction with a well-trained claims adjuster or customer services representative who can take over to resolve an issue. Soft skills still matter, and injecting a human at the right moment in the process leads to a more positive customer experience without negating the efficiency gained from using these tools.

CI&T has a range of tools and expertise for insurance providers that want to make the switch to an AI and automation-powered claims culture. These include API-driven legacy integration to modernise systems, the automation of claims, and our expertise in AI and omnichannel platforms to address customer sentiment gaps. In such a challenging macro environment for the insurance sector, the key is to back efficiency gains wherever possible, driving up customer outcomes.