How automation can reduce insurance claims costs

Efficient claims handling is critical for insurers to control costs while maintaining strong customer relationships. As claims processes often represent a significant expense, many insurance companies are turning to automation and digital transformation to optimise operations and improve service quality, according to Comarch. 

There are two main approaches to cutting claims handling costs. The first involves automating high-volume, repeatable claims typical of health or motor insurance, where processing speed and accuracy are crucial.

The second focuses on more complex claims, such as life insurance, where fewer claims require detailed verification and coordination across multiple teams. Automating the entire claims lifecycle—from first notification (FNOL) through document management, validation, and payment—helps insurers handle complexity efficiently.

Practical improvements that have proven effective include centralising claims data and documents within a secure system, automating complaint handling with prioritisation and auto-reporting, and integrating claims processing with policy administration and accounting systems.

Automating payments, potentially enabling same-day settlements, can significantly reduce payout delays. Additionally, configurable user roles and KPI tracking tools increase operational transparency and allow rapid adjustments to workflows.

Insurers can realistically expect cost savings of around 30%, though results vary depending on existing challenges and resources.

However, transformation projects often face barriers such as high upfront costs, unclear return on investment (ROI), and organisational resistance. These can be overcome through a phased implementation strategy that targets the most impactful areas first, delivering quick wins and accelerating ROI. Effective communication helps manage change and gain employee buy-in.

Beyond cost reduction, claims automation improves accuracy, transparency, and customer satisfaction by enabling faster, error-free settlements and empowering employees with better tools.

This builds customer trust and loyalty, which are essential in today’s competitive insurance market.

In summary, insurers investing in claims automation are not only optimising costs but also future-proofing their business by embracing digital, customer-centric operating models. A strategic, phased approach that balances technology with change management is key to successful insurance transformation.

Read the full blog from Comarch here.

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