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Agentic AI
Manual claims are slow and costly. Discover how enterprise leaders can implement automated insurance claims processing effectively with this guide on application and success measurement.
Manual insurance claims are slow, prone to errors, and expensive. In certain segments of the property and casualty (P&C) insurance market, larger players have achieved claims-handling costs that are, on average, 24% below those of smaller players.
For enterprise leaders, automated insurance claims offer a real path forward. But beyond the buzz, what does it actually take to implement?
This guide explains how automated claims processing works, where to apply it, and how to measure success so that you can move from inefficiency to impact.
Automated insurance claims refer to the use of technologies to manage the end-to-end claims process with minimal manual input. These technologies include:
Instead of relying on human claims handlers to review forms, verify coverage, and process payments, these tasks are automated through software that can read, interpret, and act on data in real time.
Unlike traditional methods that rely on manual review and siloed systems, automated claims processing enables insurers to move more efficiently, reduce operational costs, and enhance accuracy. It’s not merely about digitizing forms; it’s about creating intelligent systems that can assess damages, detect potential fraud, and even make decisions based on policy terms and previous claims data.
While many insurers remain stuck with fragmented legacy systems, industry leaders are adopting automated claims processing software to gain speed, transparency, and a competitive edge.
The type of claim determines the complexity of the process and how automation can assist. Let’s break down the three primary types of insurance claims and explore automation implementation examples for each.
These are filed directly by the policyholder with their own insurance company, such as a homeowner reporting storm damage or a driver claiming collision coverage.
How it can be automated:
These involve a claim made by someone other than the policyholder, like another driver filing against your auto policy.
How it can be automated:
These claims are tied to the unique terms of a policy, like life insurance, commercial liability, or travel coverage.
How it can be automated:
For example, AIA Group has implemented AI-based solutions to automate core processes in life insurance, including claims processing. Their straight-through-processing (STP) system allows for automated service without human intervention.
In Singapore, 98% of claims were auto-assessed, with 60% requiring no human intervention and paid within 24 hours. In Korea, AIA reduced the time for submitting a claim to receiving an outcome from an average of three days to just 20 minutes.
Now that we’ve looked at the types of claims that can be automated, let’s break down the claims process itself. Every insurance claim passes through a series of stages. Here’s how claims process automation applies across the six key stages of modern insurance claims processing.
Traditionally, customers had to wait on hold or complete lengthy paper forms to report an incident. Today, AI changes the process from the very first step.
One insurer using this approach is Allstate, whose QuickFoto Claim app allows customers to upload images of vehicle damage directly from their phones. AI then screens the submission and initiates the claim process automatically.
Once the FNOL is submitted, insurers must assess the damage or event. This stage has been historically labor-intensive, but AI is already driving tangible improvements.
Tractable uses AI to assess vehicle damage from submitted images to help insurers process claims more quickly.
Validating a claim—checking it against policy rules and third-party data—is one of the most critical steps, and one of the easiest to automate. Why? Because it relies heavily on structured inputs: policy documents, repair estimates, receipts, and external records that can be digitized and matched automatically. Unlike subjective assessments or human conversations, validation follows clear rules and predictable logic, making it ideal for AI and RPA tools.
Shift Technology reports that its AI quickly detects suspicious claims that would otherwise be missed manually.
With the claim validated, insurers must decide whether to approve it. Automation at this stage enhances human expertise and speeds up decision cycles.
GEICO uses AI tools from CCC to support claims decisions by detecting anomalies and streamlining fraud checks
Once a claim is approved, fast, transparent payouts are critical for customer trust.
Lemonade uses its AI-powered claims bot, AI Jim, to process and pay certain claims instantly. For example, in straightforward cases, AI Jim can review, approve, and disburse payment within minutes.
The final step isn’t just about closing the claim; it’s about learning from it.
Bold BI offers an interactive insurance claims dashboard that enables insurers to monitor key performance indicators such as average cost per claim and settlement time. The dashboard's drill-down capabilities allow users to analyze trends across different policy types and time frames.
Each stage in the claims journey presents a clear opportunity for automation to unlock faster decisions, deeper insights, and stronger policyholder trust.
Here are the most impactful benefits of automated insurance claims, supported by real-world case studies and data.
Manual claims processing often takes days or weeks due to fragmented systems, human delays, and data bottlenecks. Automation speeds this up by eliminating unnecessary touchpoints.
A major U.S. health insurer used more than 2,000 bots to process over 43 million claims in a single year. The result? Claims were handled 600% faster.
Staffing call centers, handling paperwork, and routing claims manually is expensive. Automation reduces labor costs and frees up your team for higher-value activities like exception handling and customer relationship building.
That same health insurer reported an 8X return on investment after adopting an enterprise-wide automation platform that significantly reduced operational overhead.
Human error in data entry, policy interpretation, or document handling can lead to compliance issues and customer dissatisfaction. Automation brings consistency.
An insurer achieved 99% straight-through processing by deploying an AI agent that handled claim intake, validation, and approval autonomously. This led to a 246% ROI and reduced rework from human error.
You can also check out the AI Agent Guide to explore top tools, frameworks, and use cases.
Fraudulent claims account for billions in losses each year. Traditional rule-based detection systems are limited and often reactive. AI allows for proactive fraud prevention.
AI-driven fraud detection saved insurers an estimated $5.6 billion in fraudulent payouts in 2023, according to industry analysis.
Insurance claims can spike due to seasonal trends, weather events, or economic shifts. Automation gives you the flexibility to scale up without scaling headcount.
The health insurer that automated its operations used scalable infrastructure to process millions of claims annually without increasing staffing levels.
Today’s customers expect fast, digital-first service. Automation helps meet and exceed those expectations.
USAA, a prominent U.S. insurance and financial services company, has integrated AI to improve its customer experience. By employing predictive algorithms, USAA gains insights into members' life events, such as purchasing a home or vehicle, deployment, or marriage, based on their interactions and purchases. This allows the company to proactively address members' needs.
The bottom line: Whether you're aiming for speed, scale, or savings, automated claims processing delivers measurable impact. And as the examples show, these aren’t theoretical benefits; they’re already happening in boardrooms like yours.
Aviva, the UK's largest general insurer, undertook a comprehensive digital transformation to enhance its claims processing operations. By integrating artificial intelligence (AI) across the entire claims journey, Aviva aimed to improve efficiency, accuracy, and customer satisfaction.
This case study shows how a strategic, company-wide implementation of AI can lead to substantial improvements in claims processing efficiency, customer satisfaction, and environmental responsibility.
AI is used to automate underwriting, personalize policies, detect fraud, and speed up claims processing through tools like machine learning, NLP, and predictive analytics.
AI reduces claim cycle time, improves accuracy, flags fraud, and enhances customer experience by automating tasks like document review, damage assessment, and payment triggers.
Agents use AI for lead scoring, policy recommendations, claims triage, and automated customer communications to free up time to focus on complex, high-value tasks.
Claims automation uses structured and unstructured data, including policy documents, photos, repair invoices, medical records, and third-party databases.
AI can detect fraud with high accuracy, up to 75% more effectively than manual methods, by analyzing patterns across historical claims and external data.
Manual claims processes are no longer sustainable in an industry facing rising customer expectations, growing fraud risk, and operational pressure. As we've seen, automated insurance claims processing isn’t just a technical upgrade; it’s a strategic advantage.
From FNOL to fraud detection, automation helps insurers cut costs, improve accuracy, and deliver faster, more satisfying customer experiences. And with a real-world example like Aviva, it’s clear that early adopters aren’t just getting ahead. They’re setting the new standard.
For mid-market and enterprise insurers, the path forward is clear: start small, build momentum, and scale automation where it creates the most value. Now is the time to rethink how your claims operations work before your competitors do.
Ready to build your claims automation roadmap?
Book a strategy call with Arcee AI today—we’ll help you go from concept to deployment with measurable ROI.
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