Aipedia: Claims management companies

Telling claimants you use AI

Aipedia, by the Apex broking team · Last reviewed 2026-10-30

CMCs should tell claimants where AI is used in handling their claim, especially for automated decisions, even though no CMC-specific disclosure rule exists. Clear disclosure supports Consumer Duty outcomes and helps if the firm's work is challenged.

Part of: AI in Claims management companies

In short

No FCA rule requires CMCs to disclose AI use as such, but the Consumer Duty expects firms to support informed decisions, and the FCA's October 2026 good-practice page treats telling consumers how AI is used and its limits as good practice. Where claim decisions are solely automated and significant, UK GDPR Articles 22A to 22D require information, human intervention and a way to contest. The Ombudsman has asked for clarity on AI records. Practical disclosure points are the sign-up journey, client agreement, privacy notice, decision letters and complaint submissions.

Why disclosure matters for claims firms

Claims firms may use AI at many stages: chatbots and voice agents at sign-up, automated eligibility screening, AI review of documents, and AI-drafted complaints. Consumers may not know. That matters for three reasons: consumers may rely on AI output as if a person had considered their case, the FCA's good-practice page encourages firms to tell consumers how AI is used, and the Ombudsman is wary of AI-generated material. Clear disclosure is also good evidence if the firm's conduct is later questioned.

What the FCA expects

There is no CMC-specific AI disclosure rule. The FCA relies on existing frameworks, including the Consumer Duty, in PRIN 2A.2: act in good faith (2A.2.1R), avoid foreseeable harm (2A.2.8R) and enable and support customers (2A.2.14R). Consumers can only make informed decisions about a service they understand.

The FCA's good-practice page of 19 October 2026 goes further in practical terms. It describes telling consumers how AI is used and what its limits are as good practice, alongside offering vulnerable customers a choice of non-AI support. It does not create new requirements, but it is the clearest statement of what the FCA wants to see.

Automated decisions under the DUAA

Where a claim decision is made solely by automated means and has a significant effect on the consumer, Articles 22A to 22D of UK GDPR, inserted by section 80 of the Data (Use and Access) Act 2025 and in force since 5 February 2026, require safeguards. Article 22C includes giving the person information about the decision, the ability to make representations, human intervention, and a way to contest it. An automated "you do not have a claim" message is the obvious example; see AI claim eligibility and merit screening. The ICO's AI guidance covers transparency more generally.

What the Ombudsman has asked for

The FOS response to the Mills Review asked the FCA for clarity on records of AI use, routes to human escalation, and what happens when AI is used on both sides of a dispute. It described AI-assisted submissions from professional representatives of around 200 pages with multiple inaccuracies. The FOS has not set a disclosure rule for representatives, but a firm that can explain clearly how AI contributed to a submission, and who checked it, is in a stronger position. See AI-written complaints to the Ombudsman.

Where to tell claimants

Sign-up journey and chatbots: say at the start when a consumer is dealing with an automated system, and how to reach a person (see AI onboarding chatbots).
Client agreement: describe in plain terms where AI is used in handling the claim and that the firm remains responsible for the work.
Privacy notice: explain AI processing of the consumer's data, any automated decisions, and the right to human review.
Decision letters: where a screening decision was automated, say so and explain how to ask for a review.
Complaint submissions: consider a short statement on whether AI was used in drafting and confirmation that a named person reviewed it.

Avoiding over- and under-claiming

Disclosure works both ways. Telling consumers "our AI finds claims others miss" without evidence risks a misleading promotion. Burying AI use in small print risks the opposite problem. Keep statements specific, accurate and consistent across the website, agreement and calls. Our Consumer Duty guide discusses communications more widely.

Disclosure and PI

Disclosure does not change PI cover directly, but clear records of what consumers were told can help defend a claim that a consumer was misled. Insurers may ask about your AI disclosures at renewal; our guide to what to document about AI use covers this. Apex arranges PI for claims management companies and a broker can check how your policy treats AI-assisted work. See AI in claims management.

Sources

Frequently asked

Must a CMC tell claimants it uses AI?

There is no specific FCA rule requiring it. The Consumer Duty expects firms to support informed decisions, the FCA's October 2026 good-practice page treats telling consumers how AI is used as good practice, and UK GDPR requires information about solely automated significant decisions.

Should we tell the Ombudsman a submission was drafted with AI?

There is no FOS rule requiring it. The Ombudsman has raised concerns about inaccurate AI-assisted submissions and asked the FCA for clarity on AI records. A short statement that a named person reviewed the submission can support credibility.

What must we tell a consumer whose claim was rejected automatically?

If the decision was solely automated and significant, Article 22C of UK GDPR requires safeguards including information about the decision, the chance to make representations, human intervention and a way to contest it. Explain how they can ask for a person to review it.

Check your PI covers how you use AI

Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.

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Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.