Written by Sabine VanderLinden

What if the next multi-million-dollar verdict in your claims portfolio isn’t caused by a distracted driver, but by a malfunctioning sensor in an autonomous vehicle? What if the AI tool you’re hesitating to deploy could have prevented it—but your competitor deployed it first? And what if the empathy your claims adjuster shows in that critical “moment of truth” is the only thing standing between customer loyalty and a viral social media disaster?

These are not hypothetical scenarios. They are the lived reality confronting the insurance industry today. We are at a pivotal intersection where three powerful forces are converging: a talent crisis threatening operational continuity, an AI revolution promising unprecedented efficiency but demanding stringent governance, and a customer expectation gap that automation alone cannot bridge. The question is no longer if your organization will face these tensions, but how you will lead through them.

The AI Paradox: Augmentation, Not Replacement

At the recent Reuters Connected Claims conference, a revealing paradox emerged. When claims professionals were asked if they used AI for decision-making, not a single hand went up. Yet, when asked how many used ChatGPT daily, the response was overwhelming. This highlights the central tension facing our industry: we recognize AI’s power for personal productivity, but we hesitate to trust it with our customers.

This hesitation is understandable. The regulatory landscape is a shifting patchwork, with roughly half of U.S. states having adopted the NAIC AI model bulletin, which mandates governance frameworks and risk mitigation for “adverse consumer outcomes” [1]. A federal attempt to freeze state-level AI regulation failed in July 2025, leaving organizations to navigate a complex compliance map on their own [2].

However, hesitation comes at a cost. While leaders debate governance, the technology is advancing exponentially. As the image below illustrates, the proliferation of AI models from providers like Anthropic, Google, OpenAI, and others creates a dizzying array of choices, each with unique capabilities and risks.

Leading carriers are resolving this paradox by reframing AI not as a replacement for human expertise, but as a powerful augmentation tool. Bill Van Belthusen of MSIG described it as a “virtual claim assistant” that handles transactional tasks like data entry and document summarization, freeing up human adjusters to focus on complex, high-value decisions [3]. This approach allows insurers to harness AI’s efficiency—some solutions have demonstrated the ability to reduce claims processing time by up to 80% for routine tasks—while maintaining the critical “human-in-the-loop” for final judgment [4] [5].

To succeed, leaders must establish cross-functional AI governance teams, inventory all AI tools, and train claims professionals to be what Maria Cruz of QBE calls “pilots of the plane”—in full control, using technology to navigate with greater precision and speed [9].

The Empathy Mandate: Your New Competitive Moat

In an industry historically driven by efficiency metrics, a new key performance indicator is emerging as the ultimate competitive differentiator: empathy. Groundbreaking research from Zurich Insurance, conducted in partnership with Professor Jamil Zaki of Stanford University’s Social Neuroscience Laboratory, reveals a startling truth: 60% of consumers state they select companies based on how empathetic they are [10].

This finding should reshape every claims leader’s strategic priorities. The study, which surveyed over 11,500 consumers across 11 countries, also found that 73% of consumers actively avoid businesses that demonstrate a lack of empathy, and 43% have already left a brand for this very reason [10]. In an era of social media, a single instance of a cold, bureaucratic claims experience can inflict more brand damage than a dozen inefficient processes.

This creates a clear mandate: we must balance high-tech automation with high-touch human connection. The answer is not to reject technology, but to deploy it in service of empathy. AI can be used to eliminate transactional friction—automating document submissions, providing instant status updates—thereby freeing human adjusters to be fully present and supportive during a customer’s critical “moment of truth.”

“In today’s world, empathy is key to shaping customer experience. Organizations need to embed genuine human connection as a foundation for trust, loyalty, and sustainable growth.”
— Conny Kalcher, Group Chief Customer Officer, Zurich Insurance

The data is clear: empathy is not a soft skill; it is a hard metric directly tied to customer acquisition and retention. The organizations that measure empathy alongside efficiency will not just survive the next decade—they will lead it.

The Shifting Frontier of Liability

The $243 million verdict against Tesla in August 2025 was more than just another nuclear verdict; it was a seismic event signaling a fundamental shift in the landscape of auto liability [11]. For decades, 94% of accidents were attributed to human error, making liability relatively straightforward [12]. But as autonomous and semi-autonomous vehicles become more prevalent, the core question is changing from who caused the crash to what caused the crash.

Liability is moving upstream, from the driver to the system, and from the insurer to the Original Equipment Manufacturer (OEM). This new reality requires a completely different claims skillset, one that blends traditional investigation with expertise in software systems, sensor technology, and complex product liability law. The organizations preparing for this future are already building technical expertise, forging partnerships with OEMs, and restructuring their claims organizations to handle the complexities of system-based liability.

Building the Workforce of Tomorrow, Today

The final, and perhaps most critical, challenge is the impending talent crisis. According to the U.S. Bureau of Labor Statistics, 50% of the current insurance workforce is projected to retire over the next 15 years, leaving over 400,000 positions vacant [13]. This is not a gradual transition; it is a knowledge cliff.

Zurich North America offers a powerful blueprint for navigating this crisis. Their apprentice program, which pays for college tuition while participants work part-time, has hired approximately 400 people since 2016 with an impressive 82% retention rate [14]. This success underscores a deeper truth: the next generation of talent values flexibility, culture, and purpose as much as compensation. To attract and retain them, we must build modern, inclusive workplaces that invest in people with the same urgency that we invest in technology.

A Framework for Action

The convergence of AI, empathy, and talent is not a distant future scenario; it is our present reality. To lead through this transformation, organizations must act decisively.

For the Chief Innovation Officer: Your board needs more than an AI exploration plan. They need a governance framework that delivers measurable value responsibly. Establish a cross-functional AI governance team, inventory your AI tools, and launch pilot programs focused on augmenting—not replacing—your claims professionals.

For the Tech Founder: Enterprise sales cycles are long, but carriers are eager for solutions that solve specific, urgent pain points. Position your technology within the AI governance frameworks that carriers are building. Demonstrate clear ROI with 90-day pilot pathways and show how your solution preserves the essential human-in-the-loop for critical decisions.

We are entering an era where the ability to deploy AI responsibly, cultivate empathy at scale, and build the next generation of talent will define market leadership. The opportunity—and the challenge—is to design a future for insurance that is not only more efficient but also more resilient, inclusive, and profoundly human-centered. Who will lead the way?

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Frequently Asked Questions (FAQ)

Q: How can we justify AI investment when regulations are still evolving?

A: The NAIC AI model bulletin provides clear, principles-based guidance that leading organizations are already adopting. Building a robust governance framework now—with cross-functional teams, tool inventories, and documented training—positions you for future compliance while creating an immediate competitive advantage. The greater risk lies not in moving too fast, but in being left behind.

Q: Can AI truly handle complex claims?

A: Currently, AI excels at transactional tasks like data extraction and document analysis, which can automate up to 80% of the processing time for simple claims. Complex claims that require nuanced judgment, strategic thinking, and stakeholder management still demand human expertise. The most effective model is a “high-tech, high-touch” approach where AI serves as a “virtual assistant,” empowering claims professionals to focus on high-value work. 

Q: How do we prepare for the shift in liability from autonomous vehicles?

A: Start by building in-house technical expertise. Forge partnerships with OEMs and technology providers to gain a deep understanding of their systems. Begin restructuring your claims workflows to investigate system-based failures (e.g., sensor malfunctions, software errors) with the same rigor you currently apply to driver behavior. 

Q: What is the first step to address the talent crisis?

A: If a full apprentice program isn’t immediately feasible, focus on workplace flexibility and culture. The next generation of talent prioritizes remote work options, digital collaboration tools, and a strong sense of purpose. Investing in a modern, flexible culture is a powerful retention tool and a critical first step in building your future workforce. 

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References

[1] National Association of Insurance Commissioners (NAIC). "Artificial Intelligence (AI) Model Bulletin." As cited at Reuters Connected Claims Conference, November 6, 2025.

[2] Reuters Connected Claims Conference. Panel discussion on AI governance and regulatory compliance, November 6, 2025.

[3] Bill Van Belthusen, MSIG USA. Panel discussion, "From AI Hesitation to Competence," Reuters Connected Claims Conference, November 6, 2025.

[4] Allianz. "Allianz launched its first agentic AI to automate claims." November 3, 2025.

[5] SandTech. "Four AI Trends Shaping the Future of Insurance in 2025." November 15, 2025.

[6] ARDEM. "AI in Medical Claims Processing: How Automation is Reducing Errors & Processing Time." April 7, 2025.

[7] DataGrid. "42 AI Agent Statistics for Insurance (Adoption + Impact)." March 26, 2025.

[8] International Journal of Emerging Trends in Computer Science and Information Technology (IJETCSIT). "Enhancing Claims Processing with AI." 2025.

[9] Maria Cruz, QBE. Panel discussion, "From AI Hesitation to Competence," Reuters Connected Claims Conference, November 6, 2025.

[10] Zurich Insurance Group. "Addressing the Empathy Gap: How human connection can give businesses a new competitive edge." September 23, 2025. Survey conducted by YouGov, May 2025.

[11] Reuters. "Tesla rejected $60 million settlement before losing $243 million autopilot verdict." August 25, 2025.

[12] National Highway Traffic Safety Administration (NHTSA). "The Economic and Societal Impact Of Motor Vehicle Crashes." May 2015.

[13] U.S. Bureau of Labor Statistics. As cited by Insurance Journal and Wipfli, projecting 400,000 open positions over the next 15 years. March 4, 2024 & November 19, 2024.

[14] Keith Daly, Zurich North America. Presentation on talent development, Reuters Connected Claims Conference, November 6, 2025.