VIPR: AI Won’t Fix Broken Claims Processes, It Will Expose Them

By Paul Templar, CEO, VIPR Solutions

For years, insurance claims operations have been judged on one thing above all else: speed. How quickly can a claim be processed? How efficiently can workflows be automated? How much friction can be removed from the customer journey?

Now, with AI rapidly moving from experimentation into operational reality, the pressure to accelerate claims handling has intensified again. But there is a growing danger emerging across the market: firms are becoming so focused on what AI can do that they are failing to ask what it should do, and how those decisions can be governed, evidenced and audited.

And the regulatory direction of travel is becoming impossible to ignore. The FCA’s recent signals around increased scrutiny of the claims management sector are not an isolated intervention.

They are part of a much broader focus on claims oversight, consumer outcomes and accountability across the insurance value chain. In delegated authority, especially where claims handling responsibilities are often distributed across multiple parties, the regulator is making one point increasingly clear: accountability cannot be outsourced.

This has major implications for AI deployment. The industry conversation often frames AI as a silver bullet for claims of inefficiency. In reality, many firms are making the same fundamental mistakes in their AI strategies, such as:

1. Automating poor processes. If the underlying claims data is inconsistent, incomplete or poorly governed, AI simply accelerates the problem. Faster bad decisions are still bad decisions. The market has spent years grappling with fragmented bordereaux, disconnected systems and weak audit trails. AI does not magically solve those structural issues. In many cases, it exposes them.

2. Treating AI as a replacement for operational controls rather than an enhancement to them. In regulated insurance environments, fully autonomous decision-making remains difficult to justify. Claims decisions need to be explainable, reproducible and defensible. “The model decided” will never satisfy a regulator investigating customer outcomes or claims fairness.

3. There is also a tendency in parts of the market to pursue AI deployment in an almost serendipitous fashion, implementing tools simply because competitors are doing the same, rather than because the operational foundations are genuinely ready. That creates risk.

This is why the architecture question matters so much. At VIPR, we believe the winning model for insurance is not “AI-only”. It is a deterministic process combined with AI augmentation. In practice, that means deterministic systems continue to handle core validation, governance and processing, while AI assists with exception handling, anomaly detection and operational intelligence.

The distinction is critical. A deterministic process produces the same result every time. It creates traceability. It creates auditability. It creates regulatory confidence. AI layered on top of that infrastructure can drive enormous efficiency gains without compromising oversight.

What the market needs now is not technological sensationalism, but operational discipline. The firms succeeding with AI are typically the ones taking a more methodical, multidisciplinary approach, combining compliance, claims expertise, data governance and engineering oversight into a single strategic framework.

The third and perhaps biggest mistake firms make is underestimating how quickly scrutiny is evolving. The FCA has now placed AI, delegated authority oversight and customer outcomes firmly on the same regulatory agenda. Boards should assume that claims governance, data quality and AI accountability will increasingly be viewed as interconnected issues, not separate conversations.

That means firms need to start preparing now. Not in three years. Not after regulatory findings are published. Now. Ultimately, AI in insurance won’t reward the firms moving fastest. It will reward the firms that still know exactly how and why decisions are being made.

Download and read VIPR’s full white paper: Artificial Intelligence in Delegated Authority: The market forces, regulatory imperatives, and strategic architecture that define AI in UK insurance