alt Hacker NewsYou Know Who Hates AI? Insurance Claims Adjusters
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Ultimately this isn't "AI's fault". As the article points out, clueless executives who don't understand the capabilities and limitations of specific LLMs push the technology on workers so they can say they are "using AI to improve efficiency".
Meanwhile insurance fraudsters love AI, and its ability to manipulate photos!
When there is more efficiency its a win for AI. When there are errors its the problem of the humans that are supposed to be using AI and oversee it to "make them more efficient". This has been the main source of AI fatigue for me.
My wife works in autism services. Insurance companies are the bane of her existence. Every six months (sometimes less), she has to write a huge report justifying services. These reports are frequently over 100 pages and she is only slotted so much time to do it, so she ends up doing a ton of unpaid work. The entire business model is to drown the practitioner in paperwork then use “peer reviewers” who are nurses that don’t know anything about the treatment to deny claims then waste the practitioner’s time on appeals in the hopes that people will give up. AI has obviously made this process easier and the insurance companies absolutely hate it.
People have no idea how inefficient the U.S.’s healthcare system is. And it isn’t just the private companies. A ton of states purposefully overburden and underfund their Medicaid systems for ideological reasons. Then the private insurance companies adopt the same practices later.
We are witnessing the greatest ripoff in world history. First they illegally scrape the entire history of human text, art, video, then they create products to replace humans, next the wealth of those fired humans is transferred to wealthy VCs and large businesses.
And all the while these crooks are claiming it's so humans can focus on more important things. Yeah right. If we're lucky, AI won't improve and there will be a huge backlash, like outsourcing in the early 2000s. If AI gets better, actually good enough to do most work currently done by humans, well then probably something really ugly happens.
I'm gonna use chat gpt in a few months when getting a new lease. I'll know in real time if I'm getting robbed.
So I have three thoughts about this: The first thought is this is likely mostly survivorship bias. Yes, the claims that get to the humans are the ones that went wrong, and the mode of failure for LLMs is less that they get within 99% all of the time, it's more like 1% of the time they do something insanely dumb. At which point your customers are pissed off. That's kind of obvious, and it sucks for the humans who have to clear up the situation. But it's still a win for the vast majority of cases.
Secondly, does anyone actually know how much of your insurance premium is going on the call centre staff? most people don't claim, those that do mostly have simple claims. The actual cost for insurance companies is actually paying out claims, so even if you automated all of this it likely doesn't change your economics. Historically "New" Insurance companies only really succeed by mis-pricing risk and gaining market share that way - they often then fail when that risk materializes. Lemonade sounds a lot like that.
Finally, they haven't engaged with the tidal wave that's coming. Sure, AI agents handling claims is happening now. Just you wait. In a couple of years time it'll be AI agents making the claims for you and suddenly there'll be bots filing claims with infinite patience and a direct mandate to try and get as big a payout as possible. That is when it's going to get really hairy.
Hah! Insurance companies proudly announce to investors how much they undercut payments.
It was precisely because of AI that I had the time and language to fight a recent claims report for a totaled vehicle, and squeezed an additional 25% from them. And it was still not adequate payout.
Let claim adjusters and insurance get off their high horse until they start being the bane of existence and paying what they owe clients.
LLMs are really good when your primary goal is just to fob people off. So customer support when you don't care about your customers etc. I can imagine it's very appealing when you just want to come up with semi-plausable reasons to deny insurance claims. Who cares if it's wrong? They might give up anyway and you've saved paying out!
Not saying they're not good for other things, but the "waste people's time and make them go away" use is just so perfect for the capabilities of even cheap models.
Meanwhile HR departments have started using Pangram like tools to detect and remove AI written job applications.
The flood of nonsensical AI slop applications that HR is facing has forced this.
So AI is going to take jobs not because AI is necessarily better or more appropriate, but because it accelerates bad decision making and makes those decisions exponentially worse.
Two months ago I had a water pipe burst in my house.
Now I am in the claims process with the large insurance co., using Claude to basically run my side of the claim — reading the policy, organizing and filing the ALE receipt scans, reading and notifying me of messages from the agents, calling out when they are delaying too much or not fulfilling their promises, challenging their decisions on what to cover based on the policy, keeping a log of all of our correspondences, logging work estimates and invoices, I cant imagine doing all this tedious work myself—w/o Claude I’d probably just rollover fatigued.
Does my adjuster like this? On the one hand, I’m giving her incredibly tidy and documented receipts and logs, which I am sure is saving her time.
On the other hand, Claude is calling out her BS and delays, which have been atrocious—so much so that Claude is now adamant that she has gone too far and that I should be filing a complaint with the state insurance bureau.
> Between May 2025 and May 2026, employment in the sector dropped a staggering 21 percent, according to BLS data.
Yeah sure. I mean, same reason why HN readers hate AI, right? It replaces their jobs.
(Obviously the difference is that the poor old claims adjusters didn't spend the last two decades "disrupting" every other industry and telling everyone else to "learn to code". Ha! If you hear a faint high noise, that's the sound of the rest of the world playing a violin, made of highly disruptive nanomaterials.)
Follow-up question, [Do] You know who loves flock cameras? Insurance Claim Adjusters.
They are using the cameras to catch fraud (where claimants try to lump previous damage with damage covered by the current claim.), etc.
> Between May 2025 and May 2026, employment in the sector dropped a staggering 21 percent, according to BLS data. For early-career adjusters, the decline was even sharper: Entry-level postings have fallen 50 percent since 2025…
When your business model has gotten to the point where people cheer for a guy who murdered one of their CEOs, it’s not surprising that people would not be interested in joining and may see being murdered as an occupational risk beyond what their personal actuarial tables allow.
On the outside, I was able to use a consensus model to reach a successful settlement. I wouldn’t say I won, but was made whole after having to file in court.
If AI is making their lives miserable on the inside as well, I fully support it.