How does AI claims adjudication work for P&C insurers?

AI claims adjudication is the application of multi-agent orchestration to the claims lifecycle from FNOL through adjudication, payment, and SIU referral. It covers the operational surface a working adjuster desk needs: intake, coverage analysis, reserve recommendation, payment authority gating, statutory letter generation, supervisor review, and fraud / SIU routing.

The agent fabric mirrors the underwriting side but with claims-specific specialists:

1. FNOL parser. Ingests broker email, voice transcript, portal form, or mobile photo. Extracts claimant, loss date, cause of loss, location, contact, and any third-party references with per-field confidence scores. Multi-channel intake means the desk handles incidents the moment they arrive, not the moment someone manually enters them. 2. Coverage analyst. Joins the parsed FNOL against the linked bound-risk policy. Returns covered / partial / not_covered / needs_more_info with cited exclusions, deductible position, limit remaining, and fraud flags. Refers under uncertainty rather than denying — bad-faith mitigation by design. 3. Reserve recommender. Computes base indemnity + 12% LAE + IBNR uplift (10% small → 50% CAT-related), capped at limit remaining, netted of deductible. Each revision is logged with rationale; reserves can be edited but never overwritten silently. 4. Payment authority gate. Per-adjuster bind-equivalent caps ($50k adjuster / $250k senior / $1M supervisor / $0 SIU). Over-authority pays disable the button and route through refer-to-senior with the proposed amount attached. 5. Statutory letters. UCSPA-compliant language for acknowledgment / reservation of rights (with non-waiver language) / denial (with state appeal rights) / payment notice / status update / closure / request-for-info. Cited statutes per state (Cal. Code Reg. § 2695, Fla. Stat. § 626.9541, 11 NYCRR 216.4, Tex. Ins. Code § 542). Reviewable and cancellable before dispatch. 6. Fraud / SIU lane. Rule engine (rapid-post-bind / round-loss / prior-similar / no-police-report / high-value-low-doc / inception-mismatch) plus LLM narrative agent (witness contradictions, suspicious phrasing) plus real ISO ClaimSearch and NICB Forewarn integrations. Aggregate fraud_score 0–100 with severity-weighted math; auto-route to SIU at ≥ 60.

The audit-grade properties that matter:

• Append-only history. Reserves, coverage decisions, payment approvals, statutory letters all log to immutable rows.
• Bad-faith mitigation. The coverage analyst is biased to refer over deny. Denying without a cited exclusion is the path to a state UCSPA violation.
• DOI-ready exports. Every state DOI complaint, market-conduct exam, or NAIC data request answers from the same audit trail.

AI claims adjudication does not replace adjusters. It removes the document-handling and letter-drafting burden so adjusters can focus on negotiation, investigation, and the human judgement calls.