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Transforming the Insurance Claims Process with AI

  • July 04, 2025
  • Case studies

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Source:

https://www.mckinsey.com/capabilities/mckinsey-digital/how-we-help-clients/rewired-in-action/aviva-rewiring-the-insurance-claims-journey-with-ai

 

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Problem:

Aviva is the UK’s largest general insurance company, serving millions of customers with a range of insurance products. One of the most critical aspects of its operations is the claims process, as it represents the most significant interaction between the company and its customers. 

When a policyholder suffers a loss—whether damage to property, a car accident, or even bodily harm—the claims process determines how quickly and efficiently they receive support. Ensuring a smooth experience is essential for customer satisfaction and trust.

At the same time, the cost of settling claims has been increasing at a rate faster than inflation, with costs rising 6% above the Consumer Price Index in 2019 and accelerating to 11% by 2023.

Despite the growing financial burden, much of the insurance industry has been slow to integrate artificial intelligence (AI) into claims processing, prioritizing areas like pricing and customer retention instead. 

Aviva recognized an opportunity to transform this critical function by leveraging AI to optimize every step of the claims journey—from the first notification of loss to final settlement.

Aviva must find a way to integrate AI-driven decision-making with human oversight to improve claim accuracy, reduce processing time, and manage rising costs while maintaining customer trust.

Solution:

The Complexity of Claims Transformation

Settling an insurance claim is a complex process involving multiple steps—from assessing losses and detecting fraud to determining liability and compensation. Customer needs vary, and selecting the right service providers depends on factors like expertise and availability. Addressing only parts of the process has limited impact, but equipping claims professionals with advanced tools can drive significant improvements. To maximize impact and ROI, transformation must go beyond isolated use cases and focus on the entire claims function by integrating core technology with new ways of working.

No Single Solution: The Role of AI and Culture

There was no single solution to achieving the required transformation. Implementing AI was essential but not enough; a complete cultural shift was also necessary. This transformation spanned six key dimensions—strategy, talent, an agile operating model, technology, data, and adoption & scaling—leading to the development and integration of AI tools across the claims process. Aviva engaged claims teams from the outset, with translators ensuring technologists accurately understood operational needs so that claims professionals felt true ownership of the tools before deployment.

System-Wide Collaboration and Responsible AI Deployment

Leadership strongly believed that efficiency, accuracy, customer experience, and employee experience could be improved simultaneously through a system-wide approach. A dedicated team of data scientists, engineers, business leaders, and change professionals collaborated closely with claims teams to ensure that AI models aligned with real-world needs. In addition to building AI tools, engineers developed an impact measurement framework with over 50 KPIs to track performance across the organization.

A Digital-First Culture and Tangible Impact

Each AI tool had to prove its value, so traditional methods were retained where necessary. This flexible approach allowed Aviva to transition seamlessly between digital automation and human intervention based on the case’s nature. For example, personal injury claims defaulted to human handling to ensure proper support—reinforcing the principle that financial gains should align with better customer outcomes rather than being trade-offs.

Beyond technological improvements, Aviva instilled a digital-first culture by embedding agile workflows and a data-driven mindset. Over 40,000 hours of training enhanced skills and capabilities, empowering teams to make quick decisions and take calculated risks. By integrating AI with a deep understanding of employee and customer needs, Aviva fostered a culture of continuous innovation and efficiency.

Aviva focused on real improvements for the company, its customers, employees, and, whenever possible, society—and was rigorous in measuring results. For example, By enabling claims teams to make faster, smarter decisions, Aviva cut the average time needed to assess liability for complex cases by 23 days and improved routing accuracy by 30%, which helped reduce customer complaints by 65%. 

Customer satisfaction, as measured by total net promoter scores, climbed more than seven-fold!!

Staff engagement scores doubled to reach an all-time high, and improvements such as greater accuracy in assessing damage and better selection of repair shops allowed Aviva to triple the use of recycled parts, resulting in lower costs and reduced environmental impact. 

Overall, Aviva has achieved better business outcomes by improving the way it assesses claims and attaining greater accuracy in claims management.

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