This is being caused by both a generation of experienced claims handlers and adjusters retiring and insufficient numbers of young talent entering the industry. While this loss of expertise is in part being solved for by AI and automation, the very introduction of new technology and consequent data insights is causing its own issues.
The increased use of data and technology means that roles are being reshaped with new skills required as well as maintaining the need for human skills such as negotiation, relationship building and guiding claimants during a time of high stress post loss.
Whereas once, claims handling required skills such as:
With the rise of AI and data analytics, much of the work can now be done by AI.
AI can ‘read’ and process multiple complex unstructured documents and provide an initial opinion on whether the claim is covered, an estimate of the quantum of the claim, and its propensity to head towards litigation. Data entry can also be automated, and AI is increasingly being used to triage claims, detect fraud, and streamline communications via automated emails.
What is a claims handler left to do? Now, the claims handler also needs:
According to a recent AIRMIC survey, nearly three-quarters of respondents are not prepared to challenge claims decisions made by artificial intelligence (AI):
… as well as the human skills such as:
Claims handlers of the future will need to be as comfortable managing data and technology tools as they are managing relationships as well as gaining all these skills in a hybrid working environment.
Many of the most experienced claims leaders, handlers & adjusters are nearing retirement, taking with them decades of knowledge and expertise that are hard to replace.
The Generation Z entering the workforce not only have different expectations of job roles, technology is reducing the number of entry-level positions alongside fewer opportunities for on-the-job learning and development – everyone is just too busy to train new and lesser experienced colleagues.
A vicious cycle where the industry struggles to develop talent with the expertise needed to handle more complex claims either too busy or retiring.
The good: AI enables efficiency gains, faster processing of claims and at a greater level of consistency and accuracy. It means claims teams can focus on relationship management and strategic decision-making.
AI can also analyse vast amounts of data quickly – yet more new skills are required to make sense of the data and take action based on the results. For example:
According to a recent AIRMIC survey, insureds are asking for new insights and services from the claims team that go beyond the traditional relationship building:
The bad: the reliance on technology reduces the opportunity for junior staff to learn foundational claims-handling and adjusting skills traditionally learned via hands-on and in-person experiences. AI also lacks the human touch needed for complex negotiations or empathy in customer interactions.
To address the talent gap, to keep current and retain existing expertise, claims handlers and adjusters must focus on continuous upskilling and reskilling with training programs that focus on data literacy, AI literacy and understanding, and now to use digital claims tools effectively.
Arguably more important is developing those human skills, relationships, situational awareness, negotiation skills, behavioural patterns and so on.
The future of claims handling will be defined by a hybrid approach—where technology supports, but does not replace, human expertise. Only by upskilling, developing relationships, and attracting new talent can the London Market ensure it remains competitive.
