Newsletters
Risk Central
Digital EditionThe Future of Claims Adjusting in the Age of AI
In recent years, the overall dynamics of the insurance industry, along with regulatory changes and advancements in technology, have altered the role of claims adjusters.
As if they weren’t busy enough, they should plan on being even busier going forward. Jeffrey Sickles, chief claims officer at Broadspire, said that regulatory changes governing the insurance industry are constantly evolving, and adjusters must stay updated on changes in order to ensure compliance. This includes changes in laws related to claims handling and paying benefits promptly, accurately and in accordance with state statutes.
“Customers today expect faster and more efficient claims processing. Adjusters are under pressure to provide timely responses and personalized service to meet these expectations,” Sickles said. “This often involves leveraging technology to streamline processes and improve the customer experience.”
A big challenge facing today’s adjusters is time. As Sickles explained, adjusters want to provide an excellent product and to use their knowledge to assist the claimant and help mitigate the exposure to the client.
“With all that, time is the most precious commodity for an adjuster. The adjuster is essentially a part of the client’s risk management team, but at the same time, they have duties to state regulators and the carriers sitting above a selfinsured retention (SIR) or deductible,” Sickles said.
Scott Sexton, president and chief business officer at FIGUR8 and a veteran of the workers’ comp sector, pointed out that the expectations placed on adjusters are still growing. Information tools (including AI) are advancing at a rapid pace, but they aren’t being deployed as rapidly as necessary to support claims adjuster professionals.
“While there are advances that have helped adjusters be more productive, the level of productivity requirements and expectations have continued to increase rapidly,” Sexton said.
And although there is a stronger and more visible acknowledgement of the positive role adjusters can play, there is still a tremendous amount of negative energy directed at adjusters from all sides.
“There needs to be more appreciation for the adjuster role while also bringing a level of enjoyment to a consistently demanding position,” he added.
Patrick Nails, executive vice president and chief claims officer at Arch Insurance Group Inc., said the role has evolved into much more than just bringing claims to a fair resolution. For example, adjusters at Arch Insurance regularly interact with underwriters and actuaries to discuss what claims trends they are seeing and determine if their policy language is responding to claims as expected.
“The interaction between underwriting and claims has expanded as we develop new insurance products,” Nails said. “The claims department has become an integral part of those discussions so that new product is crafted in a way to cover the peril or risk being considered.”
In Nails’ view, the role of a claims adjuster or the claims department has evolved into a partnership with underwriting units and other service units, enabling what he would refer to as a “flow of information” to those units.
“Finally, data and analytics have become part of an adjuster’s everyday life,” Nails said. “The ability to interpret and discuss what we are seeing in the data has become integral to an adjuster’s role.”
There are two areas that are changing the way an adjuster approaches each day, Nails said.
First, the industry is asking more from adjusters than just resolving claims, which certainly creates time pressure for them on a daily, weekly and monthly basis.
“We expect our claims adjusters to be resources for other areas of the company, such as underwriting, actuarial and product development, and to be a partner to those units,” Nails said. “This expansion of the role takes time and effort.”
Second, adjusters are sometimes inundated with information like data from predictive analytics algorithms. The challenge is how they manage their time, as well as how effectively they evaluate the various types of data and information being presented to them as they attempt to resolve a claim.
The Role of Technology
The industry needs to look at ways to make adjusters more efficient.
“We cannot give them more time, so we must set them up for success,” Sickles said. “We need to leverage technology in either predictive models or the use of AI to remove the mundane tasks for adjusters so they can focus on parts of the claim that provide increased customer service and mitigate the overall exposure of the claim.”
Undoubtedly, technology has revolutionized the insurance industry, and adjusters have had to adapt to new tools and software
for claims processing, data analysis and communication.
The use of technology in predictive models is bringing opportunities to adjusters in real time and efficiently allowing them to bring in the right tools and resources to move the claim forward. These tools are also focused on reducing clients’ claims costs, and the outcomes can be measured and presented back to the clients.
As Sickles explained, required data fields have also increased dramatically, as data is the name of the game in analytics.
“All of this comes down to completion by the adjuster. Adjusters are now using SMS texting as a form of communication. This has been a great tool for customer service, as everyone is on their mobile device,” Sickles said.
Sexton said AI tools will continue to advance and become better at reducing the rote, repetitive administrative workload that adjusters carry. He expects that more of the role will become a combination of critical thinking, complex problem-solving and
empathic management.
Steps to Take
Mitigating the challenges that claims adjusters are facing is top of mind for many within the industry.
“We need to refocus our efforts on training our adjusters, and I do not mean just our new or more junior adjusters,” Nails said. “If the role of an adjuster is changing, then even our most experienced adjusters need guidance and education.”
In addition, experts agree that the industry needs to be very deliberate and thoughtful in its implementation of new technology in the claims adjusting process.
Technology is obviously going to drive the evolution of the claims adjuster’s role, and it is expected to have a positive impact on
that role.
However, Nails said, sometimes we can be distracted by the “shiny new toy” without really considering if the
investment will bring value to what adjusters do every day.
“At Arch, the question we consistently ask ourselves as we consider new technologies is whether this will put our adjusters in the position to ‘add the most value,’ and in order to evaluate the technology, we include our adjusters as part of the evaluation process,” Nails said. “We believe this focus on adding value allows us to best evaluate which technologies or products to use.”
Sickles would like to see the role of adjuster evolve back to where it all started, allowing adjusters to do what they do best: investigate, evaluate and compensate on a claim.
“While all other aspects are important and need to be accomplished, we need to leverage technology to complete certain tasks and allow the professional adjuster to focus on people,” he said.
It is expected that technology will ultimately assemble all the information necessary for the adjuster to evaluate and resolve the claim. In other words, technology will read the accident report and medical report and summarize the information for the adjuster.
Technology will also provide guidance regarding coverage and coverage issues, and may provide some guidance as to the value of the claim.
“The role is going to continue to evolve into one where the focus is on consuming, interpreting and evaluating data and information, whether on an individual claim basis or a portfolio basis, then using the information to bring the claim to resolution or provide guidance to underwriting or other units in the company,” Nails said.
He does not believe that technology will replace the claims adjuster, but it will fundamentally change their job.
“At the end of the day, an adjuster’s role is to continue to provide good customer service and bring claims to a fair resolution,” Nails said. “Managing these evolving responsibilities and increasing the flow of information to continue to provide that customer service is one of the major challenges facing adjusters today.” &
