Consumers will pay to avoid AI in claims – and the youngest are most willing

Despite a fervent race to embed artificial intelligence (AI) processes into insurance value chains, consumers remain deeply sceptical of the technology, with just 36% saying they would accept a fully automated claims handling process in return for cheaper cover.

This is according to new research from professional services network KPMG, provided exclusively for analysis to Insurance Times.

The results – underpinned by a survey of 2,000 UK adults conducted between 9 and 16 March 2026 – also found that, perhaps surprisingly, young policyholders held the greatest aversion to AI.

Indeed, 66% of 18 to 24-year-olds stated they were willing to pay more for guaranteed human involvement in claims handling, compared to 55% of 24 to 44-year-olds and just 31% of over 65s.

The impact of policy prices aside, a dramatic 90% of respondents felt human interaction remains an important part of claims handling.

Despite the scepticism, Matthew Smith, partner and global claims lead at KPMG, explained that automating parts of the claims process can offer “significant value for customers, allowing for quicker settlement of claims and less expensive policies overall”.

“Technology, applied with thoughtful design, has been critical to helping bring down the cost of young driver insurance and helping make it easier for customers to buy insurance cover,” he added.

Fair and accurate outcomes

Fears over the technology largely centred around decision making quality. Indeed, 55% of surveyees cited concerns around “fair and accurate” outcomes, while 65% raised concerns about the ethics of using AI to make decisions.

Strikingly, just 5% of respondents said they were “very confident” the technology could deliver fair settlements.

The figure stands in contrast to consumer confidence in AI outside of the insurance and financial services market, in which a separate KPMG survey found that 42% of the general public had overall trust in AI systems.

Huw Evans, partner and head of insurance at KPMG UK, said: “Insurers know that customers value the human touch, but may be surprised that digital natives say they are the most willing to pay for it.

“This may partly be explained by younger customers wanting to ensure their motor and travel policies work well for their needs and less experience of purchasing insurance and making claims.”