Think about your favorite neighborhood café. The barista knows your name, remembers your usual order, and chats while your drink is being made. Now imagine that same experience handled entirely by machines—quick, efficient, but impersonal.
This simple example illustrates a bigger issue unfolding in the insurance industry. As companies embrace AI and automation to improve automated claims processing, there’s a growing risk of losing the very thing that defines great service: human connection. Technology is transforming the way we work—but when it comes to claims, empathy still matters.
The Digital Dilemma: High Tech, Low Satisfaction
In the past few years, automated claims processing have invested billions—more than $8 billion, in fact—into digital transformation. These tools promise speed, efficiency, and streamlined service. But here’s the catch: customer satisfaction with claims has dropped to its lowest point in seven years, according to J.D. Power.
This disconnect shows that speed and automated claims processing alone aren’t enough. When someone files a claim, they’re often in a vulnerable place—dealing with loss, damage, or crisis. In those moments, empathy and understanding matter just as much as efficiency.
Claims Are Expensive—And Central to the Business
Claims handling is the single largest cost center for property and casualty insurers. In 2020, about 70% of U.S. premium dollars went toward paying claims and related expenses—and that figure hasn’t changed much since.
This cost pressure makes the case for more efficient claims processing clear. But cutting corners on service or replacing people with machines entirely could do more harm than good.
The Risk of Relying on Bad Data
AI is only as smart as the data behind it—and poor-quality data can be costly. According to MIT Sloan, bad data costs companies between 15% and 25% of their revenue. For a $10 billion insurer, that’s a potential $2.5 billion loss each year.
Flawed data can lead to mispriced policies, errors in claims handling, and a negative customer experience. Even the most skilled claims team can’t work effectively without accurate, consistent information.
Customers Are Paying Attention to Claims Performance
Today’s consumers are better informed than ever. A Deloitte study shows that 44% of policyholders look into an insurer’s claims reputation before buying. That means your claims process doesn’t just affect current customers—it shapes your brand’s future.
Companies that focus only on digital efficiency, while neglecting personal service, risk losing customer trust and long-term loyalty.
AI Isn’t Replacing People—It’s Redefining Their Roles
As automation takes over repetitive tasks—like document collection and routine claims reviews—claims professionals are free to focus on the more complex and human-centered aspects of the job.
This shift doesn’t reduce the value of people. It increases it. Claims professionals can now provide more meaningful support, manage nuanced cases, and deliver personalized experiences that technology alone can’t offer.
A New Kind of Claims Work
With machines handling the busywork, claims professionals are taking on new responsibilities—like data analysis, risk management, fraud detection, and even working alongside underwriting teams to improve products.
These evolving roles mean claims professionals aren’t being replaced. They’re being empowered.
Empathy Can’t Be Automated
Technology can speed up claims. It can reduce paperwork. But it can’t replace human empathy—especially when things go wrong.
As one Chief Claims Officer put it, “Automation helps cut time and cost, but it doesn’t remove the need for personal interaction, especially when customers are facing difficult situations.”
Disaster response is a perfect example. In moments of crisis—whether it’s a flood, fire, or accident—people don’t want to talk to a robot. They want someone who listens, understands, and helps them get back on their feet.
Real-World Examples That Prove the Point
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Aviva’s Double Helix Model: Aviva blends automation with human support. For sensitive claims like personal injury, they prioritize person-to-person service—because some situations demand empathy more than speed.
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Criterion’s Approach to High-Net-Worth Clients: At Criterion, part of Charles Taylor, technical expertise is matched by clear communication and personalized service. Their clients expect it—and it’s what sets them apart.
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Avoiding Litigation Through Conversation: Attorney Patrick J. Sodoro highlights how lack of human engagement can lead to disputes. Simple conversations between adjusters and claimants often prevent misunderstandings from escalating into lawsuits.
Final Thoughts: It’s Not Either/Or—It’s Both
AI is transforming the insurance landscape, making claims faster, smarter, and more accurate. But it’s not a replacement for people—it’s a tool to support them.
The future of claims lies in the balance: automation for speed and consistency, and human professionals for care and connection. Customers may not remember every detail of their claim—but they’ll always remember how they were treated.
