Claims processing should balance improving efficiency and risk mitigation

Insurance claims service continues to be upgraded. The key is to strengthen technical capabilities, get the service philosophy right, and strike a balance among speed and stability, data and security, intelligence and human warmth.

The core value of insurance lies in loss compensation and providing a backstop for protection, and claims services are the most direct and concrete expression of that value. Recently, multiple insurance companies have successively released their 2025 annual claims service reports, from which it is possible to see profound changes taking place in the industry.

Overall, insurance claims services are showing three major trends:

First, small-amount claim cases are being moved online and automated. Process terms such as “online claim reporting,” “remote surveying and assessment,” and “direct settlement without paying upfront” have become high-frequency words in the annual reports of many companies. This fully reflects the results of the industry’s digital-and-intelligent transformation—by leveraging technology enablement, a large volume of high-frequency, small-amount, standardized risk accidents are shifted to intelligent systems and pre-set claims rules for handling. The more streamlined, paperless, and standardized processes are also faster and more efficient, and they help control claims costs.

Second, payouts for major and catastrophic accidents are becoming centralized and faster. In particular, for natural disaster incidents that have a wide impact and strong destructive power, triggering a major-disaster emergency response mechanism immediately has already become an industry-standard action. Insurers will mostly mobilize claims resources across regions to enter the disaster area. Faced with objective difficulties such as communication disruptions and transportation impediments, they take proactive steps such as simplifying proof requirements, making advance payments, and delivering payouts in a concentrated manner, so that the compensation reaches the accounts of affected customers as quickly as possible.

Third, benefits are being made more proactive and more “seamless” for people’s livelihood protection. Especially for products such as health insurance with strong public-benefit attributes, mechanisms such as opening a green channel for critical illness payouts, building dedicated customer service groups, and implementing direct settlement without paying upfront are used to reduce the number of trips and waiting time for customers. Some leading companies, supported by data platforms, also proactively identify insured customers at risk and provide seamless payout services that involve no applications, no documents, and no waiting. They also proactively extend services to help customers identify other policy rights that their claims may trigger—for example, premium waiver provisions—truly achieving “rights found for the customer.”

The transformation and upgrade of claims services reflect two key levers for high-quality development in the insurance industry. First, robust support from new technology enablement. New technologies represented by large language models, image recognition, biometric recognition, drones and the Internet of Things, and blockchain provide the conditions for the insurance industry to break away from traditional passive, manual, and paper-based claims models, shifting to a new approach that is proactive, automated, and seamless. Many companies continue to improve and iterate on intelligent claims systems, enabling multi-stage intelligent functions such as automatic categorization and pre-approval of claims cases, automatic determination of the cause and degree of loss, and intelligent detection of fraud. They can also automatically generate detailed claims evidence documentation, better supporting communication with customers and reducing disputes. The application of these technologies greatly shortens claims processing time and effectively lowers claims costs.

Second, strong guidance from new development concepts. The insurance industry’s high emphasis on the claims service experience deeply reflects a shift in its development model—from a “scale-driven” approach centered on business, to a “value-driven” approach centered on the customer. On the one hand, the industry protects consumer rights and interests in a tangible way by continuously optimizing claims processes and improving transparency, turning “good service” into a core competitive advantage. On the other hand, the industry embeds claims services deeply into scenarios such as health and elder care and disaster prevention and mitigation. In the process of supporting the development of the real economy, participating in social governance, and advancing the modernization of the national governance system and governance capacity, it better demonstrates the role and responsibility of insurance.

Hidden within these new trends are also challenges. For example, the conflict between customer experience and risk control. Moral hazard and fraud are topics that the insurance industry cannot avoid in high-quality development. If claims processes are overly complicated and review layers are repeatedly strengthened, customer experience will inevitably be sacrificed. But if the emphasis is overly on “fast,” “simple,” and “easy,” it can easily loosen review standards and induce moral hazard. Another example is the conflict between the demand for data and privacy and security. Fully leveraging the advantages of digital-and-intelligent approaches makes it necessary to have a strong big-data foundation, especially requiring the collection of more comprehensive, all-dimensional information about customers and risk carriers, but this also brings new challenges to data collection boundaries, usage scope, and security protections.

In view of this, the insurance industry’s claims services continue to be upgraded. The core is to strengthen technical capabilities, get the service philosophy right, and find a sustainable balance among speed and stability, data and security, and intelligence and human warmth.

Technology should truly be treated as a tool to improve efficiency and risk-control capabilities. Insurers should, based on a deep understanding of customers and risks, lay a solid technical foundation, improve algorithm models, and strengthen risk-control systems, so that efficiency improvements and maintaining the risk bottom line are unified. Fully respect customers’ right to be informed and right to choose, and adhere to the principles of “the minimum necessary,” “explicit consent,” and “limited use.” Clarify the data collection inventory and retention periods, actively adopt technologies such as privacy computing, data anonymization/de-identification, and access control, and, under the premise of protecting privacy, support joint risk control and precise services. They should also clearly and promptly explain to customers the claims progress, required materials, and the reasons for any denial of claims, effectively safeguarding their rights and interests. On this basis, balance technological development with humanistic care—letting platforms and models shoulder tasks with clear rules and high repetitiveness, thereby improving overall efficiency.

(Author: Lingyan Suo, Deputy Dean and Professor at the School of Economics, Peking University. Source: Economic Daily)

【Source: China Economic Net】