Crawford & Company, a leading global claims management provider, has released its latest industry report, revealing key trends and operational challenges that are reshaping the insurance claims environment worldwide. The report sheds light on the mounting pressures insurers and claims professionals face.
Climate-Driven Catastrophes Define the “New Normal”
One of the most significant takeaways from the report is the rising frequency and severity of extreme weather events, a trend directly linked to climate change. Crawford notes that this ongoing shift is establishing a “new normal” in the insurance sector—one marked by increased catastrophe-related claims and greater unpredictability.
In 2024 alone, natural disasters caused $320 billion in global economic losses, with only $140 billion covered by insurance. This was the highest insured total since 2017, underscoring both the growing scale of climate-related disasters and the increasing insurance protection gap, particularly in high-risk urban regions.
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Inflation and Supply Chain Disruptions Drive Up Claim Costs
In addition to environmental pressures, rising global inflation continues to be a critical factor in escalating claims costs. The report highlights how higher prices for building materials and labor, exacerbated by supply chain bottlenecks and international tariffs, are inflating the cost of property restoration and repair.
Moreover, stricter regulatory requirements in certain jurisdictions, such as enhanced rebuilding codes, can further complicate the claims process. These regulations often lead to longer timelines and higher expenses, placing even more pressure on insurers to adapt.
Business Interruption Claims on the Rise
Another trend gaining momentum is the increase in business interruption (BI) claims. In 2025, 31% of businesses identified business interruption as a top risk. This growing threat is fueled by:
- More frequent natural catastrophes
- Global supply chain disruptions
- Prolonged operational downtimes caused by unforeseen external events
As companies grapple with unpredictable shutdowns, BI claims are becoming more complex and financially significant, posing a serious risk to both insurers and policyholders.
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Embracing Technology: AI, Satellite Data, and Catastrophe Modeling
To respond to this evolving claims landscape, Crawford & Company is investing heavily in technology and innovation. The report from Crawford & Company outlines several tools they are using to improve insurance claims processing, efficiency and accuracy:
- AI-powered claims automation to streamline assessments and reduce turnaround times
- Satellite imagery and catastrophe modeling to evaluate damage before and after weather events
- Digital documentation and remote inspections to accelerate property evaluations
By 2025, over 50% of insurance claims are expected to involve automation or AI tools. These technologies not only enhance decision-making but also free up human adjusters to focus on more complex claims requiring critical thinking and empathy.
Crawford emphasizes that technology alone isn’t enough. The company continues to prioritize ongoing training and development for its workforce and is focused on attracting diverse, next-generation talent to meet the increasing demands of modern loss adjusting.
The Challenge of Multiple Loss Events in One Region
One particularly difficult scenario outlined in the report involves back-to-back catastrophe events in the same region. When areas are hit by multiple disasters within short periods, such as floods followed by windstorms, it becomes challenging to differentiate between the initial and subsequent damages. This complicates coverage determinations and increases claims management complexity.
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Leadership Perspective: Industry Must Evolve
Rohit Verma, President and CEO of Crawford & Company, stressed the need for bold, future-focused strategies in claims management. He emphasized that the industry must go beyond outdated methods to remain relevant and responsive.
“It is imperative that as an industry we are thinking far beyond traditional approaches and developing pioneering initiatives built upon an expanding base of expertise to ensure we can continue to deliver for clients now and into the future against such an uncertain and rapidly changing loss backdrop,” Verma said.
Bridging the Protection Gap: A Global Imperative
The Crawford report also calls attention to the growing protection gap—the difference between insured and uninsured losses. In 2024, only 40% of global disaster losses were covered by insurance, leaving a $180 billion shortfall in economic recovery.
This protection gap is particularly prominent in developing economies, where insurance penetration remains low. The report encourages insurers to expand their capacity and develop innovative risk solutions to bring more regions and populations under the umbrella of financial protection.
Key Takeaways from the Crawford & Company Report
- Extreme weather events are increasing in both frequency and intensity, driving up catastrophe claims
- Inflation and supply chain issues are significantly impacting the cost of claims
- Business interruption risks are growing, with 31% of businesses naming it a top concern in 2025
- AI and digital tools are transforming the claims lifecycle, making processes faster and more accurate
- Workforce development and diverse talent recruitment are essential to meet future industry demands
- The protection gap remains a major challenge, particularly in underserved regions
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Final Thoughts
The latest report from Crawford & Company paints a clear picture: the global insurance claims landscape is undergoing a profound transformation. With climate change, inflation, and digital disruption converging, the industry must adapt swiftly and strategically.
Insurers that invest in technology, training, and global partnerships will be better equipped to respond to large-loss events, manage operational risks, and protect businesses and individuals from the financial impact of unexpected catastrophes.
As we look ahead, automation, data analytics, and proactive claims strategies will be key pillars in building a more resilient and responsive global insurance industry.
