Claims Evolution from Human to AI

Claims Evolution from Human to AI - eaccidento

Claims have historically been a complex, labor, and paper-intensive process with stubbornly long cycle times involving large numbers of different types of service providers in fragmented industries. The global pandemic (COVID-19) emerged suddenly early in 2020 and instantly changed everything about the way we lived and worked — and insurance claims were no exception. Indeed, the pandemic forced the acceleration of the future of claims to arrive much sooner than anyone expected. Insurers rushed to minimize human contact both in the office and for their customers when they get into car accidents.

Claims costs consume an average of approximately 80% of all premium income for any auto insurance carrier. 

In this article, we overview the evolution of claims management from human to AI-based inspection and evaluation.

Auto Claims Handling Evolution
Auto Claims Handling Evolution

Auto Claims Handling Evolution

Up until 2020 different insurance carriers were on different digital transformation stages. Lexis Nexis in their 2019 report indicated the following stages from the carriers:


A process or workflow where an adjuster goes into the field, inspects the vehicle or property, and prepares an estimate.

  • Processes Cycle: 10–15 days
  • Number of Touches: 3–4 touches

Fast Track

A process or workflow that is designed to expedite claims handling with minimal insurance carrier employee involvement — for example, a direct repair program. (DRP) in which a body shop handles the inspection and repair estimate.

  • Processes Cycle: 4–6 days 
  • Number of Touches: 2 touches

Virtual Handling

A process or workflow in which either a customer or vendor captures damage photos or streaming video that allows a claims adjuster to conduct the damage assessment remotely. No insurance carrier employee conducts a physical, in-person inspection of the vehicle or property.

  • Processes Cycle: 2–3 days 
  • Number of Touches: 1–2 touches

Touchless Handling

A process or workflow that is similar to Virtual Handling except for no claims adjuster or insurance carrier employee is involved in the claims process at all. Technology is used to report the claim, capture damage or invoices, run a system audit, and communicate with the customer electronically. If the claim meets the approved criteria, the claim is automatically paid without human intervention.

  • Processes Cycle: 1 day 
  • Number of Touches: 0–1 touches

Digital Transformation for Claims Handling

Apparently, technology is the main driver for the transformational change of first notice of loss and claims to handle. As 2020 Claims Innovation USA conference participants indicated, the majority of insurers are already engaged or shop around with claims digitization providers for the first proof of concept pilots. Meanwhile, the technologies emerge, it is likely that the majority of carriers will transit to virtual claims management and then slowly progress toward touchless claim management. At least for the simple and easy cases that do not require deep investigation of the accident.