Insurance disputes arise after an individual or enterprise files a claim with their insurer, and the insurance company denies the claim. Insurance companies might provide reasons for the denial, or the insurer may leave the decision seemingly unexplained. In either case, the end result is a disputed claim. 

Fortunately, today’s artificial intelligence (AI) technology offers both computing power and speed to professionals in claims. By streamlining processes like medical records analysis, valuations, or other time consuming processes, AI can help everyone involved find a faster, fairer, resolution to a disputed claim. 

When do disputed claims occur? 

Disputing the claim can involve a number of factors, depending on the type of claim, policy wording, and legal structure in the state where you’re insured. These additional complexities might begin with getting the claim appraised by a third party, and lead to additional steps such as hiring a public adjuster or attorney. Such disputes often end up as a lengthy back and forth between the claimant and the insurer – meaning additional paperwork, added cost, and delay. 

Disputed claims occur when the policyholder and the insurer disagree on the amount and validity of the claim, including: 

• Policy coverage and applicability: insurance disputes often arise when the policyholder believes that damage caused by a specific event should be covered under the policy they own. The insurer disagrees, and there’s a dispute over whether there can even be a claim.
• Liability determination: auto, personal injury, or homeowner claims can all suffer from disputes around who is at fault. 
• Compensation or valuation: large scale claims, in particular, can become disputed when the parties cannot agree on how much to value the claim. 

Claims disputes can be a lengthy process: as an example, look to high profile insurance disputes like Financial Conduct Authority v. Arch and Others. In Arch, the UK Supreme court found that organizations who purchased business interruption insurance prior to COVID-19 were entitled to claim these losses if a single COVID-19 case occurred within their geographical property. The Arch case took 7 months to resolve, although it was considered a test, it opened the doors to more than 700 policies and impacted businesses who are likely still in the process of disputing claims. 

On US soil, consider Rigsby Sisters v. State Farm Insurance, a claims dispute that ultimately took 16 years to resolve. Rigby stemmed from Insurance carrier’s classification of claims following Hurricane Katrina – whistleblowers who worked at the firm argued that the carrier misclassified wind related damage from the hurricane as flood related damage, shifting the burden of payment to the federal government. 

How AI can streamline claims disputes 

Pressures on insurance industry profits and the workloads of claims professionals are pushing as many as 76% of insurers worldwide to adopt AI. AI’s computing power and speed might be a factor in the $9.3 billion underwriting gain that property and casualty insurers saw in Q1 of this year. 

Medical records to support a claim can be combed through and organized with AI-powered platforms. Risk can be mitigated with AI models that analyse claims data from multiple sources, use historical claims data to support predictions, and help insurers to create improvements in policies that refine safety and lower future losses. Chatbots can also be used to triage claims, leaving greater resources available for claims dispute resolution.

AI adoption is transforming the insurer landscape, but knowledge workers shouldn’t be worried – in fact, AI can make for a more positive professional experience in claims. As Deloitte consultant Sandee Suhrada puts it, “technology and talent are two sides of the same coin. Insurers are building AI technology for the talent, by the talent.” Artificial intelligence can act as an extension of the human claims professional, legal professional, or medical examiner. 

All of these areas can help explain the high adoption of AI among insurers, as well as its improved efficiency for disputed claims. By handling the tedious or manual tasks relating to claims administration and disputed claims, the human professional has more time to relate to the claimant or third-party professional and support the case – creating a better outcome for everyone involved.