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I spent hours walking the floors of large manufacturing facilities in my early days as a business journalist. It was the dark, the dingy and the dangerous back then; a dozen workers bumping elbows around the loading docks while lifting and carrying heavy things, forklifts zooming up and down cluttered aisles, stacked wooden crates leaning against walls.
Today, the same walkthrough would yield a much different view. Manufacturing spaces are immaculate, and repetitive dangerous work has been replaced by collaborative robots, automated technologies and software engineers.
Of course, manufacturers improved conditions to keep up with the competition. What BMW does, Volvo and Mercedes must also do at the same efficiency or better. Much the same can be said for the workers’ compensation insurance market. It’s a cutting-edge business—in the middle of a transition from manual repetition to automation and AI-related services.
AI is already revolutionizing insurance customer experiences, underwriting and claims processes by offering injured workers immediate access to medical professionals. This transition also means that traditional job roles at insurance companies will soon change. A whopping 81% of U.S. insurers plan to increase their AI spending the next year, according to the global tech consulting firm Wipro, and most expect AI to account for a full 20% of IT spending within the next three to five years.
Underwriting may be where insurers can will want to derive the most value from AI. The tech enables the processing of structured and unstructured data, while helping insurers realize enhanced efficiencies. Agencies and policyholder can also expect AI to reshape job functions related to document review, data entry, claims setup and triage.
To date, only 46% of insurers say they have extensively implemented AI systems into their underwriting workflows, and workers' compensation costs may soon swell thanks to reduced rates, primary claims and wage inflation.
From 2023 to 2024, wage inflation rose nearly 5%, and in 2025, the National Council on Compensation Insurance (NCCI) increased the size of primary claims to $18,000.At the same time, the workers' compensation insurance market is projected to reach $56.7 billion in the U.S., driven by market stability, rate trends, medical inflation, claims severity, regulatory changes and emerging risks.
Workers comp professionals will continue to be essential, despite the rise of AI. In the near future, insurance companies will place an emphasis on empathy for their human employees to assess risk, make strategic decisions, investigate claims and personalize customer engagement.
Winners of PropertyCasualty360’s 2025 Excellence in Workers’ Comp Risk Management — mounted in partnership with the Workers’ Compensation Institute and supported by Sedgwick and Safety National — exemplify the innovation and execution of cutting-edge workers’ compensation practices.
The City of San Diego Workers’ Compensation Program, Save Mart Risk Management and the State of Arizona Department of Administration-Risk Management Division each showcase quantifiable data for improved loss ratios and decreased litigation costs, heightened safety and an overall decrease in injured workers.
Whether it’s through loss control, safety standards or, return-to-work programs, these organizations have moved the industry forward.
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