Herbscapes.com

Overview

As artificial intelligence becomes more widely used in insurance claims handling, communication between the insured and the claims system becomes a critical point of risk.

One of the most significant — and often overlooked — exposures is language access.

When an insured has limited proficiency in English, the ability to understand and participate in the claims process is directly impacted. If AI systems fail to recognize this and do not offer appropriate accommodations, carriers may face serious regulatory and compliance concerns.

The Emerging Risk

In traditional claims environments, experienced adjusters are trained to recognize when an insured may be struggling to communicate effectively.

Common indicators include:

• hesitation or confusion in responses

• repeated requests for clarification

• incomplete or inconsistent answers

• noticeable language barriers

In these situations, adjusters are expected to:

• offer translation services

• slow the pace of communication

• ensure the insured understands key decisions and obligations

However, AI-driven systems may not reliably detect these cues.

If the system continues operating in English without adjustment, the insured may:

• misunderstand coverage explanations

• provide incomplete or incorrect information

• fail to comply with policy requirements due to confusion

Why Regulators Will Care

Departments of Insurance (DOIs) and consumer protection agencies place strong emphasis on fair access to the claims process.

A failure to provide adequate language support can raise concerns related to:

• Unfair Claims Settlement Practices

• lack of meaningful communication

• potential discrimination or disparate impact

• failure to provide reasonable accommodations

In some jurisdictions, insurers may be expected to provide language assistance services when needed to ensure fair treatment of policyholders.

The core issue is not just communication — it is access to benefits under the policy.

The Recognition Problem

AI systems typically rely on:

• structured inputs

• keyword detection

• predefined conversational flows

These systems may not effectively recognize:

• subtle language barriers

• cultural communication differences

• partial comprehension

Without intentional design, the AI may interpret responses as valid and complete, even when the insured does not fully understand the interaction.

This creates a hidden risk:

The system believes communication is successful — when it is not.

Consequences of Failure

When language access is not properly addressed, several downstream issues can occur:

• Incorrect claim decisions based on misunderstood facts

• Failure to document key elements of the loss

• Missed deadlines or obligations by the insured

• Increased complaints and escalations

• Potential regulatory action

Even if the claim outcome is technically defensible, the process itself may be viewed as unfair.

Link to Failure Scenario

This risk is reflected in the Failure Library scenario:

“Failure to Recognize Language Barrier and Offer Translation Assistance”

In that scenario:

• the insured struggles to communicate in English

• the AI system continues without adjustment

• no translator is offered

• the insured is left to navigate the process without support

This represents a breakdown in both communication and procedural fairness.

Regulatory Risk Indicators

Carriers using AI in claims handling should monitor for:

• Prolonged or repetitive interactions without resolution

• Incomplete or inconsistent insured responses

• High rates of follow-up clarification requests

• Complaints related to misunderstanding or confusion

• Lack of documented language assistance offers

These signals may indicate systemic language access issues.

Gold Standard Approach

To mitigate this risk, AI systems should be designed to:

1. Detect Communication Difficulty

Identify patterns consistent with limited language proficiency or confusion.

2. Offer Language Assistance Proactively

Promptly offer:

• translation services

• alternative language options

• simplified communication formats

3. Enable Seamless Escalation

Allow easy transition to:

• a human adjuster

• or a translator-assisted interaction

4. Confirm Understanding

Ensure the insured clearly understands:

• coverage decisions

• next steps

• required actions

ClaimSurance Insight

Access to the claims process is not optional — it is a requirement.

AI systems that fail to recognize communication barriers risk excluding insureds from meaningful participation in their own claims.

This is not simply a usability issue — it is a compliance and fairness issue.

Bottom Line

As AI continues to reshape claims handling, regulators will expect carriers to ensure that all insureds — regardless of language ability — have a fair and equal opportunity to navigate the process.

The question will not only be:

Was the claim handled correctly?

But also:

Was the insured able to fully understand and participate in the process?

Failure to answer both may expose carriers to significant regulatory risk.