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Trends Impacting Large Insurance Claims 2025

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Crawford & Company’s latest report, titled ‘Large Loss Claims Review and Outlook’, outlines the global trends and challenges impacting large insurance claims.

For businesses lodging claims, these trends and challenges can impact the time it takes to recover from a loss event.

Factors affecting claim times

The issues affecting claim times and business recovery are many and complex. However, the primary factors the insurance industry expect to persist include:

The Increasing Frequency of Natural Disasters
Sophisticated Cybercrime
Inflationary Pressures
Regulatory Requirements
Rising Business Losses Due to the Number of Businesses Affected by Weather Events

Increasing Number of Claims Due to Weather Events

It’s no surprise that Australia and the Asia Pacific are considered a disaster-prone region. We’re experiencing tropical storms, cyclones, flooding and bushfires at an increasing intensity, driving up the number of claims.

As our populations grow, so does the need for commercial and residential buildings, which in turn increases the demand for insurance. So, it’s no wonder the number of claims is on the rise. Add in global inflation, supply chain issues and loss of revenue during a loss event, and you have the perfect storm for increased costs.

Asia Pacific is home to significant banking and financial institutions, high-tech manufacturers and a booming hospitality industry. When disasters strike high concentrations of a specific sector, claim values tend to rise for that sector.

When multiple weather events hit the same area in a short period, it’s challenging for insurance loss adjusters to define damage on unresolved claims and more recent damage clearly.

It highlights the need for businesses to keep accurate records and capture photos or video of the damage to expedite claims.

The Rise of Electric Vehicles

The increase in electric vehicles, scooters and bikes is leading to widespread use of substandard charging systems. Lithium-ion batteries can spark fires that are extremely difficult to extinguish. These fires are becoming more common. They are larger and more costly to restore, which in turn affects business recovery times.

Sustainable Solutions & Carbon Reduction

The demand and regulatory requirements for carbon reduction targets are growing.

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The demand and regulatory requirements for carbon reduction targets are growing.

It can become problematic when an insured business wants to rebuild following a claim event. That’s because new sustainability codes for the building may apply that were not previously required or applicable due to the age of the original building.

Additionally, construction projects can be subject to supply chain issues, including shortages of specific materials. Such shortages can increase the time required for business recovery.

Insurers are exploring ways to balance the cost of sustainable construction within their policies, so it’s worthwhile discussing this with your adviser or seeking independent building replacement valuations to ensure your policy includes adequate sums insured limits.

Cybercrime

Cybercrime is a growing and ever-evolving threat, particularly with the increasing use of cloud-based storage for sensitive and personally identifiable information.

Cyberattacks are becoming increasingly sophisticated, tricking even the most savvy workers into clicking on malicious links. Tricks may include impersonating senior company executives or creating invoices that appear legitimate.

Businesses can take steps to mitigate the risk, such as implementing cybersecurity systems, providing cyber training, and purchasing insurance to help cover costs associated with investigations, legal action, or financial losses.

Business Interruption

Businesses must have comprehensive plans in place to address emergencies, such as a cyberattack or a weather event, that may disrupt normal business operations. This preparedness can provide a sense of security and confidence in the face of potential disruptions.

Testing plans and ensuring team members know their roles in the event of an emergency is an essential part of the business recovery process.

Business Recovery

It’s critical for businesses to actively consider risk mitigation strategies and conduct regular reviews of their insurance programs.

These measures can greatly influence the speed and success of recovery efforts. For example:

Risk mitigation strategies, such as regular maintenance programs or security systems, can help minimise the effect of fire, storms or vandalism and bolster recovery efforts
A regular review of your insurance program can ensure your business maintains adequate cover in the event of a claim.

Next steps to consider

There are plenty of steps you can take to help protect your business. We recommend businesses:

Preparation & Training

Update your business continuity plans and train staff on your emergency recovery plans and procedures.

Risk Awareness

Understand the risks to the business and the level of risk the business can financially support.

Mitigate Risks

Mitigate risks where possible.

Independent Valuations

Consider using independent insurance replacement valuations for accurate sums insured. It can provide a sense of reassurance and confidence in the adequacy of your insurance coverage.

Seek Expert Advice

Seek advice from your insurance adviser, who can review your business risks and explain how to transfer risks that you cannot keep or mitigate to insurance that fits your business needs.

If you would like to talk to someone about your insurance program, contact Clear Insurance. Our no-obligation risk and insurance review provides a detailed gap analysis report designed to help you make informed decisions about risk and insurance program. Contact Clear Insurance today.

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General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Clear Insurance, ABN 41601916689, AFSL 548953

This article originally appeared on Trends Impacting Large Insurance Claims 2025 and has been published here with permission.