Using artificial intelligence to provide a more humane claims experience

The robots are coming, and in some cases, they are here.

Advances in generative artificial intelligence are improving claims processes in many ways, from improving First Notices of Loss (FNOL) to video and image analysis to rapid claims assessment.

With all these changes, some may wonder: How long until GenAI replaces adjusters and other claims professionals?

The short answer is: it won’t be anytime soon.

Those who believe claims professionals can be replaced by GenAI fail to consider the critical role humans play in providing an empathetic claims experience, which is what customers need after experiencing a catastrophic event. And with catastrophic events becoming more frequent and more serious, empathy is at a premium.

According to the Swiss Re Institute, global insured losses from natural catastrophes in 2023 exceeded USD 100 billion for the fourth consecutive year. The institute also estimates that insured losses could double over the next 10 years as temperatures rise and extreme weather events become more frequent and intense. This season we saw Hurricane Beryl become the earliest Category 5 hurricane and Hurricane Debby brought record rainfall. And the season is growing. The National Oceanic and Atmospheric Administration issued its midseason hurricane outlook in August, which predicted 17 to 24 named storms, eight to 13 of which could become hurricanes.

Related: AI Chatbots, Gen AI Set to Revolutionize Insurance Claims Processing: Survey

While empathy is vital during the claims experience after catastrophic events, claims teams’ abilities to respond quickly with empathy are often strained by the volume of submissions and the volume of communications from claimants. After Hurricane Debby, Florida insurers received nearly 12,000 claims, according to data from the state Office of Insurance Regulation.

But by using GenAI tools, professionals claim they can increase their capacity for empathy. These solutions can ease workloads, allowing claims teams to spend extra time answering claimants’ questions and assuring them they’ll come out the other side. They can help bridge the talent gap, as professionals often claim they have heavy workloads and not enough adjuster talent. Claims teams should not see AI solutions as threats to their jobs, but as enablers for the human connection.

Finding the right balance

One of the best opportunities for AI automation concerns processes that do not interact directly with claimants. For example, automated claims review tools can assimilate data from FNOLs, photos and reports, review submissions for severity and complexity, and route them to the appropriate adjusters. This not only allows the insurer to ensure that adjusters prioritize the most serious claims, but allows the company to balance the adjuster’s workload so that they have sufficient bandwidth to provide an appropriate level of service to their claimants.

As insurers look to incorporate AI solutions into their customer-facing processes, they need to be aware of claimants’ receptivity to interacting with AI and where they would prefer to deal with a human. Chatbots and AI voice assistants can be great tools for handling calls following a catastrophic event, providing policyholders with basic information such as policy and coverage information. This can eliminate long wait times for simple questions. But policyholders with more complex issues want to speak to a human. By using chatbots and AI voice assistants for routine tasks, insurers can reduce call volume and minimize wait times for those who need to speak to a claims professional.

Day-to-day management

Communicating with claimants is an important role for claims adjusters. But managing these communications is a time-consuming activity that can take away from other important tasks. Claims management systems with AI and machine learning capabilities can help adjusters balance communications workloads. These platforms can automatically respond to routine emails. They can summarize the adjusters’ notes and send this information to applicants. With these systems, automated emails can be easily customized so that claimants don’t feel like they’re getting a generic or automated response.

Related: Using Artificial Intelligence in Claims Processing: A Balanced View

GenAI-based sentiment analysis solutions can analyze customer communications to detect tone and urgency and recommend next steps for the adjuster to take. Sentiment analysis can also help prioritize communications that may look like regular requests but require special handling. Consider a simple status update request that an adjuster receives. Sentiment analysis could detect a high level of concern and frustration in the consumer note. Rather than an automatic grade, the review could trigger a call from the adjuster.

Claims processing tools with AI capabilities can also help adjusters speed up document processing by ingesting documents, images, videos and other data and quickly analyzing and summarizing them. These tools also allow adjusters to be more organized by tracking assessments and decisions.

The human touch doesn’t have to be in person

Although complainants want the opportunity to interact with their complaints teams, this does not have to be in person. Many policyholders are open to working with technology as long as they know they have the option to speak to a person.

Virtual adjustment solutions can significantly speed up the claims process. Instead of waiting for an adjuster to visit a property, claimants can use their own phones to capture the damage through video and images. The information is then passed on to the complaints team. Virtual adjusting solutions can do an initial damage assessment, which is then shared with the adjuster to finalize the estimate.

When incorporating AI solutions into their claims processes, it is important that insurers have support from the top. Good leaders communicate with their claims teams, alleviate any concerns they have about AI, and reiterate how it will enable them to provide a better human experience to customers.

It may seem counter-intuitive. Using technology can provide policyholders with a more human and personal experience during the claims process. GenAI solutions can make it easier for declaration professionals to provide human interaction. Technology automates simple and routine tasks, reducing claims workload, giving them more time to personally interact with claimants. And technology also enables fast, personalized responses, setting up claims teams, insurers and customers for success.

Rothchild is senior vice president, head of claims at Xceedance. He leads the claims business at Xceedance and has 20 years of operations and technology leadership experience in the insurance, software and supply chain distribution industries.