Sarah Parker
You know AI fatigue is real when WIRED, a tech news outlet from outside the insurance industry, reports on the dire situation and declining morale related to AI use in insurance claims departments.
The leadership of the insurance industry has effectively sacrificed the claims department at the shrine of KPIs, to the god of Leakage Control. They tortured it for years ahead of time with rounds of mass layoffs, hiring freezes, and outsourcing to third-party administrators, and are now using AI as the final death blow.
Insiders have been saying this for years
This publicly reported AI fatigue mirrors the many issues insiders in the insurance industry have (quietly) been discussing and complaining about (so they don't get fired) over the last few years. I've seen the complaints in private industry forums online, in phone calls, in adjuster chats, and in my emails (when an adjuster forgets to remove the part of the AI response that confirms their prompt 😜).
These issues are coming from both sides: from the users on the insurer side (staff adjusters, third-party administrators, independent adjusters, and vendors), and from the recipients (policyholders, public adjusters, lawyers, and contractors).
Insurance department leadership seems hell-bent on turning the centuries-old profession of insurance adjusting into nothing more than "meat proxies" for AI models.
What is a "meat proxy"?
Instead of the human using the machine, it's the machine using the human. It's when most points of a workflow are outsourced to AI and automation so heavily that we wonder why a human is involved in the process at all. AI data, AI "reasoning," and AI decision-making, with a human shell delivering the output.
What I've seen in my short ten years
Can we get the human claims experts back, please? Here's what I've seen in my short ten years in the insurance industry:
Independent adjusters phased out, in favor of TPAs (third-party administrators).
Experienced staff adjusters pushed out, either by layoffs or by forced early retirement packages.
Experienced claims professionals struggling to find work. I see it in forums every day. Carriers seem to favor hiring people with less experience, and are training new recruits less.
Claims professionals forced into AI usage quotas, or AI use in general, for claims correspondence and coverage decisions.
The result
The result of all this? Claims take much longer to settle. Almost every decision gets kicked over to a desk adjuster with authority. More errors are made in coverage decisions and investigations. And more claims are ending up in litigation and appraisal (a dispute resolution method).
But, hey, at least the visible KPIs look great, so the execs look great.
Read the WIRED article: You Know Who Really Hates AI? Insurance Claims Adjusters
Using AI responsibly starts with us
AI isn't going away, but how we use it is still up to us. As claims professionals, it's our duty to raise our digital literacy. That helps us support consumers, protect a fair claims process, and preserve the human professions that require expertise and nuance.
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