The insurance claims process is a pivotal touchpoint in the insurer-customer relationship. When policyholders file claims, they're often experiencing significant stress and an insurer’s response during these critical moments can define policyholder satisfaction and shape long-term loyalty. However, policyholders are measuring insurance’s performance against Costco, Amazon, Apple, and other customer-centric brands they encounter daily.
Despite the high stakes, many insurers fail to deliver customer-centric claims experiences. Now, with advancements in artificial intelligence, insurers have unprecedented opportunities to transform claims from a potential friction point into a substantial competitive differentiator.
At Roots, we’re excited to collaborate with Guidewire as we progress from Vanguard to Partner, with an integration into ClaimCenter currently in development. This partnership ensures our AI-driven solutions seamlessly align with the core workflows insurers depend on, enabling quicker deployment, more efficient operations, and enhanced service for policyholders.
The Customer Satisfaction Crisis in Claims
Industry research reveals a troubling trend - insurers are still struggling to raise customer satisfaction post-pandemic. In fact, property insurance claim satisfaction hit its lowest point in seven years in 2024, according to J.D. Power. Two primary factors are driving this dissatisfaction. First, claim cycle times remain slow, leaving policyholders feeling unsupported. The average property claim cycle time from first notice of loss to final payment stands at 44 days, while the average auto cycle time doubled from 2021 to 2023. Second, as insurance premiums continue to rise - like commercial insurance premiums escalating 5.4% in Q4 2024 - customers expect proportionally better service and faster resolutions.
These pain points aren't merely operational inefficiencies—they represent missed opportunities to build trust when it’s most needed. The traditional claims approach, characterized by siloed data, manual processing, and fragmented communication channels, no longer meets modern customer expectations for speed, transparency, and personalization. Research shows that claims satisfaction scores lag significantly behind other insurance touchpoints, with 30% of customers switching providers after a negative experience and nearly half of them considering such a change.
Better customer outcomes create significant potential savings and help insurers build a competitive advantage through improved customer satisfaction.
Operational Challenges Facing Claims Departments
Insurers face substantial operational headwinds that directly impact their ability to meet customers’ expectations, including:
Process inefficiency: Most insurers still operate with fragmented workflows requiring multiple handoffs between systems and departments. These disconnects can extend processing times and increase error rates, with many insurers reporting that claims representatives spend up to 40% of their time on administrative tasks rather than customer interaction.
Escalating operational costs: Claims departments face unprecedented cost pressures from inflation, supply chain disruptions, and increasing claim severity. Without technological intervention, many insurers will face further required premium increases and margin compression.
Communication breakdowns: Despite investments in digital channels, many insurers struggle with effective communication throughout the claims journey. Inconsistent updates, technical jargon, and lost opportunities to apply a personal touch may be leaving policyholders feeling uninformed and undervalued precisely when they need reassurance most.
AI-Powered Solutions Are Transforming Claims Operations and the Customer Experience
AI technologies offer robust solutions to these interconnected challenges, delivering benefits for both operational efficiency and customer satisfaction:
Accelerating claims processing: Advanced document processing AI can extract, validate, and analyze information from diverse sources including forms, images, and unstructured data, improving claims data extraction accuracy and indexing performance. Predictive models can then identify claims suitable for straight-through processing, enabling quick resolution for straightforward claims and freeing adjusters to focus on complex cases requiring human expertise.
Cost optimization intelligence: AI systems can analyze historical claims data to identify cost-saving opportunities without compromising policyholder outcomes. From detecting potentially fraudulent claims to recommending optimal repair networks and settlement strategies to finding subrogation opportunities to reduce claims leakage, these technologies help insurers manage costs and enable competitive pricing while maintaining fairness and transparency.
Enhanced customer communication: AI enables insurers to tailor communications based on preferences, claim type, and emotional context. Machine learning models can analyze sentiment in customer interactions and adjust communication tone, frequency, and channel accordingly. This capability transforms standard claim updates into meaningful engagements that build trust and demonstrate empathy.
Deploying AI for More Responsive Claims Experiences
Implementing AI-driven claims solutions requires a strategic approach focused on customer outcomes rather than technology deployment alone. Insurers should consider the following implementation principles:
Start with customer journey mapping: Before selecting AI solutions, thoroughly document the current claims experience from the consumer’s perspective. Identify specific pain points, emotional needs, and expectations at each stage to prioritize AI investments where they'll have the greatest impact on satisfaction.
Balance automation with human touch: While AI is remarkably efficient at handling many tasks, human expertise and empathy remain essential for complex claims situations. The most effective AI implementations enhance human expertise, allowing claims professionals to focus on high-value customer interactions.
Establish clear performance objectives and metrics: Define specific customer satisfaction KPIs for your AI implementations, including metrics like Net Promoter Score, resolution time, and first-contact resolution rate. Use these metrics to continuously refine your approach and ensure technology delivers meaningful improvements.
Insurers who thrive in the coming years will recognize claims not just as a cost center to be optimized, but as a critical moment to deliver their brand promise. By leveraging AI solutions like Roots, coming soon to the Guidewire Marketplace, carriers can elevate customer satisfaction at every stage of the claims process. They can transform this traditional pain point into a powerful differentiator while simultaneously addressing operational challenges and cost pressures.
The future of insurance claims isn't just about speed - it's about creating supportive, transparent experiences during people’s most challenging moments. The technology to deliver this transformation exists today. The question is which insurers will lead this customer-centric revolution, and which will be left behind.
To learn how insurers are using AI to drive operational improvements, download Roots’ State of AI Adoption in Insurance 2025 report.