Last May, Amsterdam was the place to be. More than 50 business leaders from the insurance sector from over 20 different countries came together for the thirteenth edition of their annual Claims Forum. It turned out to be a pivotal moment. The sector has focused on operational efficiency and cost management for years, but a more fundamental change is now needed: a ‘rewiring’ of claims handling, in which technology, data, and human-centred leadership go hand in hand.
It is an interesting era for the claims sector. With inflation and an increase in operational costs, the increasing legislation, and high customer expectations, margins and processes are under pressure. Inflation is partially caused by high costs of labour and parts. Operational costs also increase due to a larger number of claims. Customers complain quicker and expect transparency, speed, digital accessibility, and interaction. An increasing regulatory pressure is placed due to a need for transparency, for example, concerning the affordability of insurance premiums. IA (Insurance Affordability) is a common topic in that context. When costs and damage burden increase for insurers, then premiums will also increase for the insured. Premiums for car insurance have, for example, increased in the UK by 43 percent in one year; and in France premiums for home insurance by 10 percent.
Some indicators over the 2020-2024 period
Inflation of material damages in motorised vehicles
Inflation of material damages in home insurance
Costs of only processing claims (in Europe)
Complaints about claims handling
It can be different
Finalta, part of McKinsey & Company, is a worldwide service provider when it comes to benchmarking, especially for banks and insurers. Their research shows that some market leaders do better than others. There are insurers that pay out 13 percent less on average when it comes to motorised vehicle damage claims. Or that can keep an equal damage amount, despite an increasing number of climate-related damages. Or that can detect twice as many fraudulent damage claims and affect a higher customer satisfaction rate. What are these market leaders doing differently from the general sector? They innovate and invest in digital technology, take data-driven decisions, and focus on customer orientation.
Damage due to extreme weather
Percentage of weather-related damages in 2024
Damage burden after floods in Europe
4 billion euros
AI and data are ‘key’
The benchmark shows that it can be different if the sector reinvents itself and structurally rewires the claims process. Rewiring is the ability of an organisation to constantly innovate using digital and AI across its business to improve customer experience, reduce unit costs, and drive growth. Technological innovation is, therefore, key. That could involve real-time communication with victims via customer portals and apps. Or remote expertise of damages via photos, videos, or sensors. Or direct cash settlement in case of smaller damages, or support in rapid and sustainable damage repair. In this, the application of Artificial Intelligence and (historical) data is no longer a luxury, but a necessity. AI reduces operational costs when it is used for triage at First Notice of Loss. AI and data analytics can be helpful in risk predictions and decision-making around liability or repair, and reparation. Moreover, the combination of AI, data, and human expertise appears to be a golden ratio to handle claims quicker, fight fraud more efficiently, and increase customer satisfaction.
Result application Artificial Intelligence
Lower damage burden
Quicker claims handling
Higher fraud detection
2x
More than technology needed
Technology offers unprecedented possibilities to make the claims process faster, smarter, and more customer-oriented. But the key to success lies not in technology alone. Rewiring requires an integral approach in which strategy, technology, data, competency, and change management are combined. It also requires an investment in people and processes, in competencies and culture. So that claims handlers can develop from manual processors of claims to small, agile teams with a high degree of knowledge, skill, and digital expertise. And it is about ‘flip thinking’. So that insurers no longer see claims handling as an expenditure, but as a strategic instrument to increase customer satisfaction and improve their market position.
CED Claims has spent the last few years developing innovative solutions for claims handling, in which technological innovations (portals, platforms, remote expertise), AI and data, and the commitment of highly educated claims handlers are successfully integrated. Read more about that here.
[Source: McKinsey & Company – Claims Forum 2025; Insurance Innovators Summit 2024]