In a world obsessed with speed, automation has become the buzzword of the decade. From instant payments to artificial intelligence and modern claims management systems, the claims management process has seen remarkable technological leaps that are transforming how companies handle cases. Yet, as systems become smarter and faster, one truth remains: claims are still about people.
Every claim represents a story, an accident, a loss, or a major disruption. And while technology can speed up paperwork, only humans can truly understand the needs behind those stories and the nuances of each case and client.
APIs and automations have transformed claims management software, reducing manual errors, improving operational efficiency, and building a trackable history of claims data. These advances have introduced data-driven decision-making into the claims lifecycle, improving speed but also creating new challenges in preserving empathy and customer experience.
However, automation starts to fail when claims fall outside expected patterns. When context, ambiguity or emotion enters the scene it is imperative that experience and human touch contribute to the process.
A workflow engine can decide whether a claim meets a policy’s threshold, but it cannot hear the frustration in a customer’s voice when they’ve been displaced from their home. A chatbot can acknowledge a message instantly, but it cannot read between the lines, think creatively or offer reassurance.
Automation can work for clear scenarios where deviations are limited. For example acknowledging the receipt of a claim or sending a reminder for a 15-day review. However, industry experience repeatedly shows that automation alone can backfire.
⚠️ When Automation Gets It Wrong
The real world shows how blind faith in algorithms can backfire, harming customer satisfaction, disrupting claims processing and generating costs instead of savings.
Over a recent three-year period, a Department for Work and Pensions (DWP) algorithm flagged more than 200,000 housing benefit claims as “high risk” for fraud or error. However, two-thirds of those flagged turned out to be legitimate, leading to unnecessary investigations. The DWP has admitted that approximately £4.4 million was spent on checks that delivered no savings.[1]
Relying on artificial intelligence to interpret legal or regulatory requirements can be equally risky and subject your company to the wrong claim judgement based on incorrect information. Incorrect or fabricated information can result in poor decisions, financial penalties and reputational damage. A federal judge in Alabama recently fined and reprimanded a lawyer who used AI to draft court filings containing inaccurate case citations. [2]
Even outside the insurance sector, companies are experiencing the consequences of flawed automation. Taco Bell recently had to reassess its rollout of AI-powered drive-through systems across the U.S. after viral videos highlighted amusing yet concerning malfunctions - such as orders mistakenly containing over 18,000 cups of water or repeated, nonsensical questions. These issues caused customer frustration and attracted negative attention online. [3]
What Humans Do Best
While machines excel at processing information, they lack the capacity to interpret meaning.
Skilled claims professionals play a vital role in maintaining fairness and accuracy throughout the claims administration and compensation claims process.
The expertise and human judgement of claims handlers, adjusters, and customer care professionals remain irreplaceable. Here are some of the strengths that cannot be replicated:
1. Empathy and Emotional Intelligence
A good claims handler knows when to listen and picks up subtleties. They pick up cues in tone, pauses and unspoken emotions, understanding what a claimant needs beyond just money.
2. Judgement and Context
Claims don’t always follow the rules. Humans interpret nuance whether it’s a technicality in a policy or a unique circumstance that automation may flag as “non-standard.”
3. Ethical Decision-Making
There are moments when fairness and policy diverge. People have the ability to make moral choices that strengthen trust, loyalty, and the brand’s reputation.
4. Creative Problem-Solving
Where software stops at “invalid input” people find workarounds, negotiate settlements and de-escalate frustration.
5. Building Trust
While automation improves efficiency, humans create relationships. A personal email, a reassuring phone call or a fair-minded explanation can turn a negative experience into lifelong customer loyalty.
6. Experience
Nothing can replace first-hand experience in the field and the relationships built over time. In claims management, real-world experience equips professionals with the intuition to read situations beyond what’s written in a report.
Strong relationships, whether with policyholders, repair networks, or colleagues, create trust and transparency. These connections often determine how efficiently a claim is resolved and how satisfied a customer feels at the end of the process.
🤖 + 👩💼 The Power of Human-Software Collaboration
The future of claims management isn’t about choosing between people and technology, it’s about designing systems where both work in harmony.
Software handles the routine: data capture, classification and routing.
Humans handle the exceptional: ambiguity, negotiation and empathy.
Together, they deliver: faster processing, fewer errors and happier customers.
For example, while automation can send claim status updates, the claim handler should personally manage complex communications. Software engines may be able to estimate claims severity, but only humans can contextualise it with local knowledge and customer history.
The result? Efficiency with empathy and accuracy with accountability. This hybrid model is the foundation of improving claims outcomes and delivering real-time insights that enhance overall customer service and satisfaction.
🧩 Designing Automation That Supports Humans
To strike the right balance, software systems should be built around human oversight, not human absence. The goal of any claims management system should be to increase operational efficiency without compromising trust or understanding.
While simplifying automation is important, organisations should also foster a human-first culture. The myth of automation as a miracle cure for saving time and money needs to be challenged — automation alone cannot solve every problem, and in some cases, it may even create new ones.
When implementing AI or automation, consider the following principles:
- Automate only when confidence is high and build "exit ramps" to direct uncertain or complex cases to human experts.
- Empower claims managers with clear options to override automation when necessary.
- Leverage human insights to continuously refine and improve models.
- Train teams to view automation as a supportive tool, not a total replacement for human judgement.
Automation should be used to handle the heavy lifting, inspire and increase speed not to replace human input.
❤️ The Future: Intelligently Human
As claims management evolves, we shouldn’t ask “How do we remove humans from the process?”. Instead, we should ask, “How do we empower humans to do their job the best they can?”
Technology and AI should free up time and enhance knowledge and precision, they should not replace judgement and experience.
Because in claims management, efficiency without humanity is a false economy.