Context Over Prompts: The Critical Shift for AI Success in Insurance

By: Sean G. Eldridge | September 29, 2025

Sean G. Eldridge is the Co-founder and CEO of Gain Life, a venture-backed insurance technology company that helps individuals and organizations return to health, work, productivity, and financial wellbeing. Prior to Gain Life, Sean led a private equity-backed roll-up in the disaster restoration space and held leadership roles at Johnson & Johnson, Procter & Gamble, and Weight Watchers, launching new products and services that leverage the power of behavioral science and technology. Sean earned his B.S. in Management Information Systems from Rochester Institute of Technology and MBA from Harvard Business School. He resides in Cambridge, MA with his wife, son, and corgi.

A few years ago, I attended an insurance technology conference where one session after another focused on the art of the perfect prompt. We all scribbled down example instructions, as though capturing secret recipes, convinced that if we found the right wording, artificial intelligence (AI) would transform our businesses. It felt a bit like learning to speak a new language overnight. Fast forward to today, and the conversation has shifted completely.

The magic isn’t in the phrasing anymore. It’s in the information the AI has at its disposal.

As these models have grown smarter, they no longer require detailed instructions. Instead, what matters now is ensuring the AI has access to the right information: what has worked for your business, which data drives actual outcomes, and what’s relevant for the problem at hand. This gave rise to what’s now called context engineering, the practice of intelligently managing what information the AI can access when making decisions.

The Shift in Practice

In 2023, evaluating a workers’ compensation claim with AI meant writing a prompt that specified every step. First, check the injury date. Verify employment status. Review medical documentation. Assess state regulations. Calculate benefit rates. Insurance companies maintained libraries of these prompts, some running thousands of words, trying to capture every possible scenario. The use cases were limited to simple Q&A and basic document generation.

Today’s models already understand what claims processing involves. They know medical review means checking diagnoses against treatment protocols. They understand that employment verification requires confirming active status at the time of injury. The intelligence is there.

But intelligence without information is useless. A model might understand claims processing perfectly, but if it cannot access the injured worker’s previous treatment history, the employer’s policy details, or the relevant state regulations, it cannot make decisions. The challenge shifted from teaching the AI what to do to ensuring it has the right information to work with.

This shift unlocked entirely new possibilities. Instead of just answering questions about coverage, AI is now handling complex multi-step processes: full claim adjudication, fraud pattern detection across multiple cases, real-time treatment authorization, even predicting claim trajectories based on historical patterns. With the right context, AI can handle everything from customer inquiries to underwriting decisions to fraud detection.

3 Challenges of Context Engineering

Making context engineering work in insurance isn’t straightforward. The theory is clear, but implementation requires mastering three distinct challenges:

1) Context Selection: Knowing what information to provide has become the new critical skill. Even as context windows grow from 4K to 100K-plus tokens (roughly 3,000 to 75,000 words of text), more isn’t always better. Do you provide full medical history or just recent treatments? Raw doctor’s notes or summarized findings?

The expanding context windows mean you can include more, but that makes intelligent selection even more important. Success requires both technical understanding of how AI processes information and insurance knowledge about what actually drives claim outcomes.

2) Security Architecture: AI needs information in its context to function, creating new vulnerabilities. Users might try to extract information about other claimants or reveal proprietary patterns through prompt injection, attacks that embed hidden commands in normal requests.

The solution requires dynamic context assembly based on who’s asking, filters preventing inappropriate data from entering context, and audit trails tracking what context was assembled for each interaction.

3) Integration Reality: Insurance data is scattered across countless systems, with claims in one place, policies in another, and medical records arriving by fax. A workers’ compensation claim might need data from HRIS systems, multiple EMRs, case management platforms, and regulatory databases.

Systems must also remember previous interactions rather than starting fresh each time. Doing this successfully, requires unified data access layers, semantic reconciliation, and real-time pipelines that assemble context on demand.

Looking Forward

Moving from prompt to context engineering means rethinking how insurance companies deploy AI. The competitive advantage won’t come from having the smartest AI, but from giving that AI access to the right information at the right time, while maintaining security and compliance.

Ask questions. Can you explain why context needs change between first notice of loss, initial reserve setting, and claim settlement? How will you handle role-based context assembly for different users? Can you pull real-time data from legacy policy administration systems? What happens when a claim spans multiple states with different regulations? How do you prevent prompt injection from exposing other claimants’ data? Can you maintain context across a claim that takes weeks to resolve?

Use these questions when evaluating vendors. If a vendor can’t explain their integration architecture or security model, they’re not the right partner. If they talk about AI capabilities but not about data access, they haven’t solved the real problem. The best vendors understand that success in insurance AI depends less on having the most advanced model and more on understanding the complexity of insurance data, the reality of legacy systems, and the critical importance of security and compliance.

The winners in insurance AI won’t be those with the cleverest prompts. They’ll be the ones who master providing the right information while maintaining the standards that insurance demands. &

New Jersey WCMCO vs MCO

The importance of care direction and the provider network.

By: Horizon Casualty Services, Inc. | September 2, 2025

Workers’ compensation is designed to provide medical care and wage replacement to employees who suffer job related injuries or illnesses. In New Jersey, workers’ compensation is regulated by the Division of Workers’ Compensation under the Department of Labor and Workforce development.

A critical component of a successful workers’ compensation system lies in how medical care is delivered and managed. This is where the distinction between a Workers’ Compensation Managed Care Organization (WCMCO) and a traditional Managed Care Organization (MCO) becomes especially important. Horizon Casualty Services (HCS) is an affiliate of Horizon Blue Cross Blue Shield of New Jersey; however, the product that HCS delivers to its clients – a robust occupational health network – is different than the medical products that Horizon Blue Cross Blue Shield of New Jersey delivers to its members.

A WCMCO is specifically designed to address the unique needs of the workers’ compensation system. A traditional MCO operates in the group insurance space focusing on providing access to routine and preventive care and managing complex health care needs in the right setting, while a WCMCO is structured around the effective and appropriate management of occupational injuries. A WCMCO focuses on timely treatment, appropriate return to work strategies, and regulatory compliance within the workers’ compensation framework. While both types of organizations manage provider networks and oversee care delivery, a WCMCO must adhere to different standards and legal obligations specific to workplace injuries. A WCMCO must focus solely on the claimant’s injury and not take into consideration the claimant’s other health conditions.

Provider networks play a pivotal role in the effectiveness of the overall workers’ compensation process. These networks are composed of physicians and specialists experienced in occupational medicine and trained in the documentation and protocols necessary for managing work related injuries. HCS partners with providers on education, a critical component to maintaining its prominent status in New Jersey. Using specialized oversight strategies also ensures providers meet performance benchmarks. This includes regular quality audits, outcome tracking, adherence to evidence-based guidelines such as ODG, and prompt communication with all parties involved in the claim.

WCMCOs focus on return-to-work outcomes, or the complexities of workers’ compensation claims management. The HCS provider network has been cultivated over the last 30 years to streamline and identify the best occupational health providers in New Jersey. HCS established and maintains its own Outcomes Focused Network (OFN) which ensures claimants will receive optimal care.

Heidi Coluni, Director of Provider Network Services, HCS

Heidi Coluni, Director of Provider Network Services, HCS, added “When I joined the organization almost 5 years ago, I did not realize how different a WCMCO operates from an MCO and the utmost importance of having the right provider in place the very first time an injured worker is seen. The OFN that my team has built over the years under Maura Berger, RN, ensures that our clients have access to not only providers, but access to providers who understand the difference between an injured worker and an insurance member.”

“I quickly learned that it’s nearly impossible to treat an injured worker like a member, so I dropped my MCO mindset,” Coluni added.

One of the most important advantages of having the right provider network in place is the ability to direct care from the outset of a claim. In New Jersey, employers have the right to choose the treating physician for workers’ compensation claims. This means that if a robust and high-performing provider network is already established, the employer or insurance carrier can quickly direct the injured worker to a highly qualified, in-network physician who specializes in occupational injuries. The early intervention is critical for several reasons:

1) Getting the injured worker to the right doctor early improves diagnostic accuracy and treatment outcomes. A provider familiar with work-related injuries will not only treat the condition effectively but will also be equipped to assess work restrictions and recovery timelines.

2) Early and appropriate care can reduce the likelihood of complications or delayed recovery, which in turn lowers the cost of the claim.

3) Timely and transparent communication from the provider helps claims adjusters make informed decisions quickly, preventing administrative delays and ensuring that benefits are delivered without unnecessary interruptions. Collaborating with providers ensures that notes are delivered promptly, and causality statements are clear right from the start.

Moreover, the direction of care at the beginning of the claim helps establish a framework for consistent, goal-oriented treatment. With the right providers in place, treatment plans are more likely to align with return-to-work goals and avoid unnecessary procedures or referrals. This coordination promotes accountability between workers, employers, and insurers.

The structure and oversight of medical provider networks are essential components of the workers’ compensation system in New Jersey. By leveraging the strengths of a well-managed provider network, employers and insurers can ensure that injured workers receive prompt, effective care from the right specialists. This early direction of care not only enhances recovery outcomes for the injured workers but also contributes to the overall success and efficiency of the workers’ compensation claim process. HCS is well poised to offer its workers’ compensation clients and prospective clients a network of professionals focused on occupational health throughout New Jersey.

For More Information

To learn more, email Jed Hoban, HCS Business Development Executive, at [email protected] or visit or visit https://www.horizonblue.com/horizoncasualty/.

About Horizon Casualty Services, Inc.

HCS, in business since 1994, is a leading PPO in New Jersey WC and PIP. HCS has a 100% direct-contracted provider network that includes almost all New Jersey acute care hospitals. The network delivers significant overall savings and, with its deep focus on precision, an extremely low appeals rate. Its PPO results, combined with its Healthcare Value Strategy and Outcomes Focused Network, enable insurers to be the best at delivering quality medical care to claimants at the right cost — clearly a win-win for all. HCS and Horizon Blue Cross Blue Shield of New Jersey are independent licensees of the Blue Cross and Blue Shield Association.

This article was produced by the R&I Brand Studio, a unit of the advertising department of Risk & Insurance, in collaboration with Horizon Casualty Services, Inc. The editorial staff of Risk & Insurance had no role in its preparation.

Horizon Casualty Services Inc., an affiliate of Horizon Blue Cross Blue Shield of New Jersey, in business since 1994, is a leading PPO in New Jersey workers' compensation and personal injury protection. The company's 100% direct-contracted provider network includes almost all New Jersey acute care hospitals, significant overall WC savings and, with its deep focus on precision, an extremely low WC appeals rate of 0.2%. Its PPO results, combined with its WC healthcare value and OFN strategy, enables insurers to be the best at delivering quality medical care to claimants at the right cost — clearly a win-win for all.