By Lewis Nibbelin, Research Writer, Triple-I
Mounting cost pressures and evolving customer expectations have outpaced the insurance industry’s traditional approach to claims management, prompting many to integrate digital tools into the handling process, according to a recent report from Contractor Connection, a Crawford & Company business.
Citing research from McKinsey, the report examines how digitizing claims operations can lower end-to-end costs by up to 30%, driven by shorter cycle times and improved routing accuracy. Deloitte data reinforces this finding, showing that automation in claims handling can reduce human error by up to 25%, the report adds.
Underlying these figures is a broader industry shift toward diversifying the claims process, allowing carriers to evaluate each claim based on its unique components. Alongside peril-specific information, the report identifies three key dimensions for effective claims categorization:
- Severity, which determines the need for on-site inspection, specialized expertise, or claims escalation;
- Complexity, based on a combination of quantifiable and qualitative factors impacting the claims journey; and
- Coverage confidence, or the initial assessment of alignment with policy terms.
Introducing digital tools into the front end of this process “ensures policyholders are engaged quickly, high-quality data is collected, and claims are directed to the most appropriate channel from the outset,” the report emphasizes, particularly through AI and IoT technology that can capture highly granular risk and loss data.
Gathering this data early and accurately from the first notice of loss (FNOL) is foundational to claims performance. Crawford cited an Accenture report that found 82% of insurers identify FNOL data quality as the top driver of efficient and successful claims resolution, signaling the benefits of applying digital models that are less prone to manual errors.
Consumers also value these faster processing times, as claims resolved within 10 days score far higher in customer satisfaction and are strongly correlated with increased renewal likelihood, according to a 2025 study by J.D. Power.
Challenges emerge, however, when data is incomplete or inaccurate, which can lead to system failures that create new exposure and erode policyholder trust. Crawford’s report stressed that phased rollouts and continuous training and oversight remain crucial to ensuring digital and automated pathways are working as intended and to maintaining transparency in digital-first models.
When paired with appropriate monitoring, such models help facilitate diverse claims handling that “strengthens negotiation outcomes, improves customer trust, and reduces indemnity and operational expenses across the claim lifecycle,” the report concludes. In the modern risk landscape, this segmentation “is no longer a competitive advantage; it is an operational imperative.”
Habitual, Actionable Communication Key to Rebuilding Trust
RiskScan 2026 Reveals A More Interconnected Risk Landscape
Allstate, Aspen Initiative Seeks to Ease Trust Gap
Tech — Especially A.I. — Is Top of Mind for Global Insurance Executives
