How Ethical AI is Reshaping Claims Handling with Discovery Navigator

April 11, 2025 / 5 min read

AI isn’t just a tool for automation—it’s a powerful enabler for property/casualty claims teams of all sizes, experience levels and capacities, empowering them to efficiently manage any caseload, confidently navigate complex documentation and most importantly, make better decisions. The question is no longer whether AI should be used; it is about how to use it responsibly and ethically to protect both the business and the policyholders it serves.

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As the insurance industry evolves, so do its challenges. Bodily injury claims are becoming increasingly complex, seasoned adjusters are retiring at a faster pace, and fewer qualified professionals are entering the field. A 2023 McKinsey & Company study found that over 70% of insurance executives cite workforce shortages and rising claim complexity as major obstacles¹.

To meet these challenges, insurers are turning to AI-enabled solutions to automate routine, but time-consuming, tasks that may also be prone to human error due to the size and complexity of the task. As a result, there is a reduction in errors or missed critical information and turnaround times are improved. AI systems that automate medical record review of files that could be hundreds of pages in length, for example, are proving invaluable. They can reliably extract critical data from complex documents, freeing up claims teams’ time to focus on more strategic, high-value work while providing accurate file summaries for decision-making.

By eliminating the need to spend hours, or even days, manually extracting intricate details from complex medical records, AI can be a transformative force. It empowers claims teams to operate more efficiently while enhancing policyholder satisfaction through more timely and consistent settlements.

Addressing the Data Governance Dilemma

Effective bodily injury claims handling depends on reviewing large volumes of sensitive documents, and AI is only as reliable as the data it analyzes. Limited or poor data integrity can lead to inaccurate decisions, negating potential efficiency gains. McKinsey reports that 68% of leading insurers cite data reliability and transparency as critical factors for AI success².

To build ethical and trustworthy AI systems, strong governance practices are essential:

Data Audits: Ensure compliance with GDPR, CCPA, and other privacy regulations by documenting how medical and claims data is collected, processed, and stored.
Bias Detection: Implement safeguards to prevent outdated or unbalanced data from skewing claim outcomes.
Clear Accountability: Assign oversight to dedicated data governance teams, aligning with NAIC standards and regulatory guidelines.
With regulators paying close attention to AI-driven decision-making, sound data governance is critical for both compliance and cultivating trust among policyholders, claims professionals, and industry stakeholders.

Discovery Navigator™, Verisk’s medical record review platform, addresses challenges related to data quality, staffing constraints, case complexity, and increasing caseloads. Built on decades of data management expertise, its architecture promotes ethical data practices and undergoes rigorous oversight. With just a few clicks, users can generate detailed, accurate reports of critical medical data. This is especially important for claims teams with junior team members lacking the medical knowledge and experience of seasoned staff.

Going Beyond AI “Black Boxes”

One of the biggest concerns in AI-driven claims handling is the lack of transparency in certain AI models. This opacity can raise regulatory concerns and erode trust among both insurers and policyholders. The World Economic Forum emphasizes that interpretability and traceability are essential for ethical AI³. Many insurers look to the NAIC model law for guidance on data security and privacy standards, which provides the foundational framework that encourages insurers to adopt responsible governance and risk management practices aligned with evolving regulatory expectations.

To improve transparency, insurers should:

Document Decision Flows: Maintain clear, auditable records of AI-generated claim recommendations.
Engage Cross-Functional Teams: Involve diverse reviewers to assess AI outputs and flag potential errors.
Provide User-Friendly Reporting: Equip adjusters with intuitive tools to interpret AI recommendations effectively.

Many insurers follow governance models from organizations such as Amazon Web Services (AWS) and the National Institute of Standards and Technology (NIST), using frameworks like the AI Risk Management Framework to ensure secure model training, deployment, and real-time monitoring.

Why Human Expertise Matters Most

While AI significantly improves efficiency, it cannot replace human expertise - especially in nuanced or complex cases. The most effective insurers use AI to support, not supplant, their claims professionals by:

Enhancing accuracy by unlocking insights that may be missed manually.
Improving efficiency with little to no IT lift.
Reducing repetitive tasks, allowing adjusters to focus on high-value decisions.

Discovery Navigator was built with this approach in mind. By incorporating deep clinical expertise and a responsible AI model framework, Discovery Navigator delivers reliable, well-organized reports from extracted data, empowering claims professionals to make more confident, informed decisions.

Embracing Ethics as a Competitive Edge

Ethical AI is no longer solely about compliance, it has now become a strategic advantage. According to Gartner, 79% of insurance executives believe transparent AI builds customer loyalty³.

Leading insurers are prioritizing:

Regular governance audits to stay ahead of evolving regulations.
Partnerships with industry experts to shape best practices.
Clear communication with policyholders about how AI informs their claims.

What’s Next?

As AI regulations evolve, positioning your organization for the future requires more than reactive compliance. Insurers must stay agile, anticipate stricter oversight, and leverage responsible AI to maintain policyholders’ trust. Moving forward, insurers should:

Proactively Track Regulatory Changes: Maintain a flexible governance strategy that adapts to new laws and guidelines.
Invest in Scalable Solutions: Ensure AI systems can evolve alongside emerging technologies and shifting industry demands.
Cultivate a Culture of Accountability: Embed ethical considerations at every stage, from data collection and to claims decisions.

Adopting transparent and adaptable AI solutions, such as Discovery Navigator, will not only ensure compliance with future regulatory standards but also provide a competitive advantage in an evolving market.

AI-Driven Claims Handling, Built for Trust

AI-driven claims handling is most effective when it’s transparent, secure, and aligned with regulatory standards. Discovery Navigator was built with these principles at its core, helping insurers:

Enable better decision-making through automated medical record review.
Ensure compliance with industry-aligned governance and end-to-end data security.
Empower—not replace—claims professionals with actionable insights.

With a focus on ethical implementation, Discovery Navigator helps insurers improve efficiency while reducing risk.

Ready to Take the Next Step?

Whether you’re just beginning your AI journey or looking to strengthen existing systems, responsible governance is key. Connect with our team to explore how AI integration can transform your claims process.

Learn more about Discovery Navigator.

Did you know Discovery Navigator is a core component of Verisk’s integrated approach to Demand Package Review? Working seamlessly with Liability Navigator^®, the two platforms enhance claims teams’ ability to confidently address complex demand packages with AI- and data-driven precision.

Learn more about Verisk Demand Package Solution Set.

McKinsey & Company. (2023). How generative AI will transform insurance. https://www.mckinsey.com/industries/financial-services/our-insights/how-generative-ai-will-transform-insurance
World Economic Forum. (2022). Blueprint for ethical artificial intelligence in insurance. https://www.weforum.org/whitepapers/blueprint-for-ethical-artificial-intelligence-in-insurance
Gartner. (2023). Top trends driving the insurance industry in 2023. https://www.gartner.com/en/articles/top-trends-driving-the-insurance-industry-in-2023