Oxbow Partners, a management consultancy focused on the insurance sector, has released a report titled The Future of AI in Claims, assessing how artificial intelligence could influence claims operations and decision-making within the commercial and specialty insurance markets.
The publication considers the potential for insurers to move beyond using AI primarily to streamline workflows and reduce operational expenditure, towards applying the technology to generate information that could support wider business activities.
Oxbow Partners suggests that the significance of AI in claims may extend beyond operational efficiency, particularly where insurers can use historical and current claims information to inform underwriting decisions, pricing models, portfolio performance assessments and risk evaluation.
The consultancy notes that claims records contain information about loss outcomes, the effectiveness of underwriting decisions and the results of different claims management approaches. However, it observes that insurers have often faced difficulties extracting meaningful insights from this information because of fragmented technology systems and the substantial volume of unstructured documentation.
According to the report, AI offers a means of addressing some of these limitations by enabling insurers to examine larger quantities of claims information and identify relationships or trends that may previously have been difficult to detect.
Oxbow Partners acknowledges that AI is already being introduced into several stages of the claims process, including the initial receipt of information, document interpretation, case prioritisation and support for claims handlers.
Nevertheless, the consultancy considers the potential applications to be considerably broader. It points to opportunities for insurers to assess how individual claims might develop, identify cases where recoveries may be possible, recognise changes in loss experience and make claims-related findings more readily available to underwriting and pricing teams.
The report also cautions against adopting a uniform approach to AI implementation across the insurance market. Oxbow Partners argues that insurers should determine their priorities according to their specific operating models, portfolios and the types of claims they manage.
For example, the consultancy indicates that the potential uses of AI may differ between insurers taking a leading role on policies and those participating as follow markets. Similar variations may arise between classes of business with relatively short claims settlement periods and those where liabilities can develop over several years.
Oxbow Partners also distinguishes between claims involving legal proceedings and those primarily associated with physical damage, noting that the characteristics of these cases can affect the suitability and value of different AI applications.
Alongside these considerations, the consultancy places particular emphasis on the quality and accessibility of underlying information. It suggests that the benefits of AI may be restricted where insurers lack consistent data standards or where relevant records remain separated across different business functions.
The report indicates that investment in AI should therefore be accompanied by improvements in how claims information is collected, organised and shared. Without these measures, Oxbow Partners warns that technology adoption could compound existing data problems rather than deliver more reliable analysis.
In considering how claims departments may develop, the consultancy expects AI to assume a greater role in repetitive and administrative activities while claims professionals continue to oversee matters requiring specialist knowledge, negotiation and judgement.
Oxbow Partners suggests that the longer-term distinction between insurers may depend less on the extent of automation achieved and more on their ability to apply lessons from claims experience to future business decisions.
Miqdaad Versi, Partner at Oxbow Partners and author of the report, added: “Claims teams sit on some of the richest data in insurance, yet most of it has never been properly used. The real opportunity with AI isn’t just handling claims faster – it’s learning from every claim and feeding that insight back into underwriting and pricing. That only works with strong data foundations and a strategy that reflects each carrier’s business. The insurers that get this right won’t just run cheaper claims functions; they will make better risk decisions.”
