How Artificial Intelligence Is Changing Workers' Compensation

According to a recent Global Technology Industry Association report, 55% of companies are currently using artificial intelligence (AI)-enabled systems in the course of their work, and an additional 45% are exploring its implementation for the future.¹ For this reason, the global AI market is forecast to have more than a 36% compound annual growth rate by 2030.² McKinsey has pegged the long-term opportunity in AI at $4.4 trillion worth of added productivity growth.³

Workers' Compensation is no exception to this trend, with AI adoption happening broadly across the industry right now. While employee tracking, workplace cameras and other technologies have been used for years to improve on-site safety efforts, compliance and lower claims costs, AI is an emerging part of the insurance toolkit. Some carriers are using AI to do claims analysis and value projections, while others have developed their own internal AI tools to help with claims management and other functions.

Overall, however, AI adoption across the industry remains fairly low.

"We're still at the infancy of AI, but there are definitely applications coming," says Joe Clifford, area president. "It could be used by magistrates to understand case law; they could type in a few words about the case they're looking at and might be able to find case law from decades ago that applies. And AI will be a tool used throughout the compensation system, whether it is underwriters looking at an insured's loss history in a more consolidated fashion for projecting future claims or claims adjusters having a better idea of what comorbidities cause certain injuries to worsen in order to improve prevention."

Other potential applications for AI in Workers' Compensation include:⁴

• Better forecasting of outcomes. Using AI technology to identify patterns in injury care based on historical data can help practitioners choose more effective treatment plans and lead to better long-term outcomes. This includes better forecasting of the time required to reach maximal medical improvement (MMI), synthesizing data from similar cases to identify key factors and benchmark treatments and timelines.
• More accurately determine settlement pricing. The AI-enabled review of thousands of past settlements in similar cases can help parties determine the true financial implications of a given injury claim, rather than looking at each case individually. This review can lead to better, more accurate settlement models that provide more accurate, equitable outcomes and reduce the likelihood of disputes due to faster review and resolution.
• Reducing patients' return to work time. Injured workers return to work faster when their care is carefully tracked and monitored to ensure positive outcomes. But it can be difficult for current systems to follow patient progress, especially at scale. AI can offer better real-time monitoring performance to ensure that patient recoveries remain on track and identify areas of potential need for further care to improve overall outcomes.

Whatever the case, as it stands today the Workers' Compensation insurance market is primarily using AI to help make quicker and better decisions. Eventually, that could turn into new efficiency gains, with one person overseeing AI-enabled service hubs that are currently being managed by several employees, but how quickly that happens will depend on the efficiencies it offers.

Patrick Edwards, area senior vice president, Workers' Compensation practice leader, agrees, particularly on AI's ability to help Workers Comp providers better manage and improve risk exposures.

"We're already seeing a use of cameras and other electronic devices to check workplace safety practices and evaluate what employees are doing and how they're going about their jobs," he says. "In addition, there are also 'wearable' bracelets that can track how people are performing tasks like lifting boxes — that provide data on how safely the employee is performing a job task on-site."

With AI, these types of existing technologies can be tracked and optimized to improve overall job safety outcomes and reduce the potential for loss for all involved.

"If AI saves companies money, they're going to do it," Clifford says. "And if it helps them use eight employees to do what used to take 10 or 15, they're going to do it even faster."

Learn more about what's next for the Workers' Compensation insurance market in the 2025 US Workers' Compensation Market Outlook.

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