James Nicholson: What to keep an eye on in the claims sector for 2026

While the wider insurance industry eagerly awaits a Christmas break, the claims sector never sleeps – something that Zurich’s chief claims officer James Nicholson knows all too well.

With nearly three years’ experience in his position, Nicholson has steered Zurich through evolving geopolitical and cyber risks and, of course, the growing influence of artificial intelligence (AI) on the customer journey.

Looking ahead to 2026, Nicolson tells Insurance Times that his eye is on the claims that this phase of digital transformation could bring. 

Indeed, in the Insurance Times AI Claims Report 2025/26, published in October, 38% of surveyed insurance organisations reported that they were piloting or testing AI tools.

While this approach to innovation has become a go-to for firms to stay ahead, Nicholson believes that the impact of this rapid innovation will soon be felt in the claims sector. 

He says: “There are a number of companies out there currently who are utilising AI and we haven’t really seen any claims being presented to us as a result of failing AI systems or the wrong decisions being made [in] customer experience.

“I suspect that we’ll start to see more of an uptick of those in 2026 and beyond.”

Nicholson continues, adding that AI is already changing the way claims are presented.

On a customer basis, he notes a trend towards “more literalisation of AI”, in which customers are increasingly using AI to draft and negotiate claims or disputes in the commercial market.

He explains that this has created an “interesting dynamic” from a claims perspective with individuals using AI to present complaints with references to FCA rules, conduct risk or consumer duty which “we haven’t seen previously”.

“Where it becomes interesting is the time soak in order to address all those points that are being made, [which are] not necessarily valid points either,” he adds.

Investing in protection 

Fraud remains an unrelenting pressure on the claims sector, with advances in AI adding fresh layers of complexity and opening new avenues for abuse – ultimately driving up premiums for legitimate policyholders.

According to the ABI research from November 2025, fraudulent claims totalled around £1.16bn in 2024 – up 2% from £1.14bn in 2023.

Indeed, after Zurich exited the personal lines market at the back end of 2023, Nicholson says that he expected to see a significant proportion of fraudulent claims drop.

Instead, he says that the insurer saw “a significant uptick in identified fraud” during 2024 through to 2025.

In 2024, Nicholson notes that the overall identified fraud for Zurich was in an excess of £90m, which is “essentially identifying £260 worth of fraud on a daily basis”.

The biggest contributor was casualty claims presented by third parties, he explains, accounting for 65% of all bogus claims.

Despite the counter fraud measures in place, Nicholson explains that it is the insurer’s responsibility to “keep pace” with the “always diversifying” fraudsters and “demonstrate the fraud deterrent tools that [the industry] has”.

In the last six weeks, since Zurich partnered with Quantexa’s AI-enabled decision intelligence platform in October, Nicholson says it has already identified over £2m worth of fraud in comparison to the previously used tool, which only identified £500,000 worth of fraud a year. 

He says: “We are utilising tools like that to protect [local authority budgets] and, indirectly, we’re protecting the public purse.

“It costs money to build these tools, but it’s absolutely the right thing to be doing not just from a commercial perspective, but from a broader public responsibility perspective.”

Understanding customer needs

While the industry’s gaze is firmly fixed on integrating AI to hit back at challenges on all sides, Nicholson’s eye is on the impact of investing in client relationships.

Zurich global study in September 2025, entitled ‘Addressing the Empathy Gap: How human connection can give businesses a new competitive edge’, revealed that 43% of respondents had left a brand in the past due to a lack of empathy.

It also showed that 71% of those surveyed believe AI cannot recreate genuine human connections, while 92% valued direct human interaction over 24/7 availability.

For a man who deliberately chose a career in claims to gain an “understanding [of] customer needs” in the sector, Nicholson stresses that empathy can be taught and that it is a “powerful” tool to harness for the claims experience.

Since 2023, Zurich have embedded empathy training globally, with 26% of employees having invested 46,000 hours in either face-to-face or online training, he explains.

“It has an impact on the customer experience at the claims end, but also it has a direct impact on the reason as to why people would look to try and bind business with Zurich,” he continues.

While building interpersonal skills in its claims handlers grants a “competitive edge”, Nicholson adds that, at its core, “it’s the right thing to do” to ensure that “human connection” is not lost in the claims experience.