Think about your favorite local diner—the kind of place where the staff knows your name, pours your coffee just the way you like it, and remembers to ask about your kids. Now imagine that same diner run entirely by machines. Sure, the service might be faster, but would it feel the same?

That’s the crossroads where automated claims processing companies find themselves today. As the industry leans into AI and automation to speed up claims and improve efficiency, there’s a growing concern: What happens to the human side of service? The good news is, it doesn’t have to be an either/or choice. In fact, the smartest approach combines the best of both worlds—using technology to support people, not replace them.

We’re Spending More on Tech—But Customers Aren’t Happier

Over the past few years, insurers have poured more than $8 billion into digital transformation projects. The goal? To modernize claims handling and give customers a smoother, faster experience. But despite all that investment, satisfaction with the claims process is actually going down. According to J.D. Power, it’s at a seven-year low.

Why the disconnect? Because during a stressful moment—like filing a claim after a car accident or a home fire—customers want more than just speed. They want empathy, understanding, and clear communication. Technology can help with efficiency, but it can’t replace human connection.

Claims Are the Industry’s Biggest Cost

For property and casualty insurers, claims make up the majority of operating costs. In fact, in 2020, about 70% of every dollar collected in premiums went to claims payments, investigations, and settlements. And that percentage hasn’t moved much.

With numbers like that, it’s no wonder there’s pressure to make the automated claims processing leaner and more cost-effective. But here’s the challenge: how do you improve efficiency without sacrificing service quality?

The Data Dilemma: Garbage In, Garbage Out

One of the biggest risks in relying heavily on automation is poor data. A report from MIT Sloan Management Review found that bad data could cost companies up to 25% of their revenue. For a $10 billion insurer, that’s a loss of $1.5 to $2.5 billion every year.

Bad data can lead to underpriced policies, denied claims, or flawed decisions that frustrate customers and hurt business. Even the best claims teams can’t do much if the information they’re working with is wrong. That’s why data accuracy and standardization need to be priorities in any digital transformation.

Claims Experiences Influence Buying Decisions

Today’s consumers are more informed than ever. Nearly half (44%) of U.S. shoppers look into how insurers handle claims before deciding which company to buy from, according to Deloitte. A bad reputation in this area can seriously hurt business.

That’s why balancing automation with human service isn’t just a nice-to-have—it’s a competitive advantage.

The Role of Claims Professionals Is Changing, Not Disappearing

As more digital tools enter the scene, some people worry that AI will replace claims jobs. But what’s actually happening is a shift. Automation is taking over the repetitive, time-consuming parts—things like collecting data or processing straightforward claims. That frees up professionals to focus on more complex cases where human insight and empathy are essential.

For example, resolving a lost smartphone claim might only take a few clicks. But a family who just lost their home in a fire needs more than automation—they need someone to guide them, support them, and help them feel seen.

What the Future of Claims Work Looks Like

With technology doing the heavy lifting, claims professionals are stepping into more strategic roles. Some are diving into data analysis or identifying fraud. Others are collaborating with underwriting teams, helping refine policies based on real-world claims trends.

The shift also means stronger focus on customer relationships. Professionals aren’t just problem solvers—they’re becoming advisors, educators, and advocates.

Empathy Still Wins

Let’s be clear: automation is here to stay. It’s improving workflows, cutting costs, and increasing consistency. But there’s one thing it can’t do—show compassion.

One Chief Claims Officer put it perfectly: “Just because you’re automated claims processing doesn’t mean you should remove the human element. It’s still critical to the overall customer experience—especially when things go wrong.”

In disaster response, for example, you can’t send a drone to comfort a customer who just lost everything. You still need people on the ground—field agents who can offer not just help, but hope.

Real-World Examples Where Human Touch Made the Difference

• Aviva’s Personal Injury Claims: Aviva uses a hybrid “double helix” model that combines automation with human support. For sensitive claims—like those involving injuries—they always prioritize a personal touch. It’s more than just efficient; it’s compassionate.

• Serving High-Net-Worth Clients: Criterion, a Charles Taylor company, handles complex claims for affluent clients. According to Managing Director Helena Evans, their success isn’t just about technical expertise—it’s about responsiveness, managing expectations, and building trust through communication.

• Preventing Legal Issues: Attorney Patrick J. Sodoro highlights how a lack of human contact often leads to disputes and even lawsuits. Claims adjusters who pick up the phone and talk to claimants often resolve misunderstandings before they escalate.