The sentiment is unfolding alongside a steep contraction in claims-adjuster employment. Bureau of Labor Statistics data shows employment in the sector fell 21% between May 2025 and May 2026. Glassdoor separately found that entry-level postings have dropped 50% since 2025. That decline has moved faster than an earlier BLS forecast. In 2024, the agency projected that the number of U.S. claims adjusters would fall by 18,900, or 5%, over the following decade, with technology cited as an important factor.
Insurers are now using AI across several parts of the claims process. Automated systems can handle initial loss reports, analyze photos and videos for damage estimates, summarize medical records, and process uploaded documentation before issuing payouts.
For adjusters, the problem is often what happens when those systems get something wrong. Ahmad Jackson, who worked in the claims department of a major insurer, said his employer introduced AI for initial loss reporting with the goal of routing simple claims automatically and sending more complicated cases to people. Instead, he said adjusters began receiving incorrectly classified claims that had to be redirected manually. He also encountered errors in AI-generated summaries and sometimes passed those inaccuracies on to claimants or attorneys before realizing they were wrong.
AI is “getting things wrong,” Jackson said. “And it's implementing more work onto the adjusters.” He later left for another insurance carrier.
Other workers describe a broader exhaustion with how quickly the technology is being introduced. “There's an AI fatigue,” said Geoffrey Conrad, a claims executive in Mobile, Alabama. “We're pretty much exhausted as far as the amount of AI being shoved down our throats.”
The concerns are not limited to workload. Some adjusters believe the same systems they are being asked to use could eventually reduce the need for their jobs. “There's no jobs, there's no good job prospects,” Martin said.
His research found that employee reviews become more hostile toward AI when workers expect layoffs or believe poorly performing tools are being imposed on them or their customers.
Investment in automating insurance has continued despite that resistance. Startups including Liberate and Pace have raised funding around AI-based insurance tools, while established insurers are increasing their use of automation.
Lemonade has gone particularly far with that model. By the end of last year, its AI Jim chatbot handled 96% of initial claim reports, while automation processed roughly 55% of all claims. Paul Staats, a Lemonade spokesperson, said the technology changes the mix of work rather than eliminating the need for people entirely. “AI is going to impact many jobs and threaten many incumbents in insurance and the economy,” Staats said, adding that automation allows employees to focus their “empathy, care, and expertise on the most complex claims.” He also said Glassdoor’s findings “should be taken seriously across the industry.”
State Farm has emphasized a more blended approach. Representative Justin Tomczak said the company wants to “give State Farm agents and employees better tools so they can spend more time doing what matters most: helping customers.”
Some adjusters agree that AI can be useful for lower-stakes administrative work. Jackson said he uses it for routine tasks such as extending rental-car bookings.
The larger concern is reliability in situations where small errors can change a claim outcome. Sandy Avina, a former claims adjuster who now works as an industry consultant, said adjusters do not have “a lot of faith in the output.” A flawed document scan can lead to an incorrect AI interpretation, while an incomplete summary of a medical record can omit information that matters to a payout. When that happens, customers may blame the adjuster without realizing an automated system caused the error.
Conrad argues that the limits are especially important in claims involving personal loss. Before entering the insurance industry, he lost his house in a fire. He said that experience shaped his view of what policyholders need from adjusters during major events. “I needed somebody to make sure that I'm OK, my family's OK, that we're safe,” Conrad said. He believes AI can support that work, but not fully replace the human role. “AI is just a tool,” he said. “It should never be given the keys.”
For insurers, the technology offers a way to automate intake, document review and other repetitive parts of claims processing. For adjusters, however, the rapid rollout is increasingly tied to job losses, reduced entry-level opportunities and frustration with systems they say can create new errors instead of eliminating old ones.
This analysis is based on reporting from Wired.
Image courtesy of Economical Insurance.
This article was generated with AI assistance and reviewed for accuracy and quality.
