AI Is Reshaping Insurance: What Claims Pros and Lawyers Must Know Now

Artificial intelligence has become a significant industry trend that is here to stay. Insurers no longer use AI as an experimental tool but instead have ingrained it into everyday insurance operations. Notably, carriers utilize AI for underwriting, pricing, claim intake and claims processing. The direct impact of AI in the litigation sector could start before suit is filed and, in some cases, before coverage is determined.

Underwriting Reframe

One of the most significant developments for insurers in the AI context is the use of AI-driven models to predict loss probability at the individual-risk level. This means that instead of relying on broad actuarial groupings or traditional rating factors, modern analytical tools can evaluate each risk independently. In theory, this could allow a home insurer to input home type, roof age and location and receive a determination of the probability of a loss happening during the policy period. This approach allows carriers the flexibility to make generalized risk assumptions and move toward a tailored system to dictate underwriting decisions, policy terms and pricing.

Another major impact of AI is the ability to identify underwriting red flags that do not typically appear in traditional methods—for example, unusual or irregular claim-reporting patterns, maintenance or repair history or claim activity that may deviate from the norms for similar risks.

Conventional underwriting focuses on tangible characteristics such as age of the structure, measurements or protection class while AI goes deeper. It can detect behavioral and temporal patterns that would otherwise be overlooked in the large volume of data for myriad reasons, including human error. With the fast-paced growth of AI, insurers are now able to identify risks that present heightened exposure at the onset that would appear acceptable under traditional underwriting guidelines.

Leading Carriers And AI

Major insurance carriers like State Farm, Allstate, Progressive, Liberty Mutual, Nationwide and USAA have already begun implementing AI in day-to-day underwriting and claims operation activities. While the platforms utilized by carriers may vary, all have acknowledged using AI to some extent to support underwriting decisions, streamline workflow and improve efficiency.

Industry regulators and oversight organizations have also recognized the growing presence of AI across the insurance market. To illustrate, the National Association of Insurance Commissioners conducted surveys and research regarding insurer use of AI and machine learning software. They demonstrated widespread use of AI for claims estimation, segmentation for claims triage and data collection in both the home and automobile sector. It is now embedded into widespread functions throughout the insurance industry.

The rapid integration of AI is alleviating increased pressure on insurers to process claims faster and more efficiently. According to the JD Power Auto Claims Satisfaction Study, it takes an average of 22.3 days for a car insurance claim to be resolved. Home insurance claims take longer, around 23.9 days. This reflects both consumer expectations and competitive pressures that continue moving carriers toward greater automation. AI-enabled systems can also expedite document review, estimate assessments and claims routing, which in turn allows carriers to reduce backlog and process a higher volume of claims without increasing overhead to optimize staffing levels.

A growing number of insurance-focused service providers are developing AI-based products designed to support compliance, operational management and regulatory matters. ReSource Pro is a strategic operations and compliance partner for the insurance industry that publicly emphasized AI’s role in improving efficiency and driving profitability for carriers and staffing. In late 2025, ReSource Pro announced an acquisition of Supportive Insurance Services, another company known for insurance licensing and renewal services. This goal of the acquisition is to provide more comprehensive compliance solutions for insurers and intermediaries. This development also shows that adopting AI is not limited to just underwriting and claims handling but will extend to regulatory licensing, and operational structures, too.

Reshaping Insurance Litigation

The use of AI by insurers is predicted to transform insurance litigation. As carriers start relying on AI to evaluate underwriting and claims, the same tools will become available in the legal context to streamline case assessment early on. Accordingly, the developments in AI will not cause the insurance litigation industry to fade but instead will align with newly adapted methods already being implemented by carriers. As AI continues advancing, legal teams can expect to start seeing technology play a greater role in analyzing liability exposure and strategic planning with insurer clients.

One example is AI being designed to review thousands of claims files, estimates, photographs, adjuster notes, communications and policy documents to identify patterns relevant to causation disputes, coverage issues and damage assessments. AI will have the ability to expedite the comparison of disputed claims with vast pre-collected data from similar losses and in turn will help counsel and adjusters evaluate whether a particular claim materially deviates from typical loss patterns. Analyzing in this reshaped manner can significantly improve early risk assessment and settlement strategies.

Another anticipated trend for AI is the use of litigation forecasting, meaning legal teams will gain a deeper understanding of historical case outcomes, venue-specific tendencies, claim characteristics and predictive models to generate probability-based analytics for evaluating the likelihood of success in litigation a claim. AI will not replace attorney judgment but rather will drastically improve strategy decisions at the onset. This potentially saves carriers litigation costs if a case is deemed an early settlement candidate. Alternatively, AI may assist with analyzing whether a case presents unusual exposure when compared to similar facts already litigated in a similar area.

AI can already be seen at an operational level for automating routine and time-intensive tasks. This includes document classification, privilege review assistance, summarizing deposition transcripts and identifying key facts within document-heavy discovery. In the context of insurance litigation, attorneys are often required to review large volumes of documents, some of which can be redundant. AI’s automation is intended to allow litigation teams to spend less time focusing on manual review and instead work more efficiently on higher-value or time-sensitive items.

Defense Teams Stand to Gain…If…

From a defense perspective, the shift to using AI will potentially improve both efficiency and consistency. AI can reduce delays in discovery, streamline expert preparation, limit oversight and enhance internal reporting to carriers regarding case posture and liability exposure. One thing AI will not ultimately supersede is the necessity of legal teams to analyze ever-evolving case precedent, procedural rules and matters that solely require in-person attendance.

The expanding use of AI also raises important considerations regarding transparency, evidentiary reliability and expert disclosures. As insurers start to rely more heavily on automated tools for claims handling and underwriting decisions, litigators may encounter heightened scrutiny for their methodologies. Nonetheless, it is important for lawyers to understand how these systems operate and how they are structured but not to rely on AI as the sole decision-maker. Attorneys must also be considerate of data sources, potential bias, waiving privileges by using AI hosted through public platforms and the general credibility of the information. The inability to distinguish between human thought and artificial processes could lead to grave consequences when shaping litigation strategies.

Ultimately, this means there is a trending shift in how legal work in the insurance industry will be performed. AI use will continue to increase to streamline litigation. This assistance in productivity will potentially allow attorneys to focus more deeply on legal strategy, advocacy, nuanced legal matters and professional judgment as this is where experience, credibility and case-specific reasoning remain essential.

As AI continues to mature, its role within insurance litigation is likely to expand rather than replace the role of lawyers in the insurance industry. As AI streamlines, automates and enhances analytical functions, it will free up legal counsel to focus on what only they can do: evaluate facts, apply the law and guide clients through complex disputes.

Gross, an associate at the law firm RumbergerKirk, represents insurers, manufacturers and businesses in a range of disputes, including automotive warranty and lemon law litigation, premises liability claims, negligent security matters and first-party property claims. Email: jgross@rumberger.com.

Carey is a partner at RumbergerKirk. He represents insurance companies in first- and third-party coverage matters, including claims involving personal and commercial lines of insurance and claims involving extracontractual liability and bad faith disputes. He also represents excess insurers in claims involving complex legal issues and significant exposure. Email: bcarey@rumberger.com.

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