4 Strategies to Navigate Insurance Claims Trends

4 Strategies to Navigate Insurance Claims Trends
July 7, 2025 22 mins

4 Strategies to Navigate Insurance Claims Trends

Navigating Insurance Claims Trends: 4 Strategies for Effective Claims Management

Dynamic trends are influencing the size and complexity of claims around the world. Proactive claims management can help organizations recover swiftly after a loss event and manage potential claims exposures.

Key Takeaways
  1. Interconnected risks — such as geopolitical volatility and social and economic inflation — are intensifying claim complexity and values, with the effects felt across regions, supply chains and industries.
  2. Organizations and societies hit by natural catastrophes and cyber attacks are left indelibly altered. These events disrupt business activities and contribute to the frequency of claims.
  3. The rise in large and complex claims requires enhanced claims management strategies, including working with an experienced insurance broker to address the evolving nature of risk.

The Global Claims Landscape

Climate volatility, cyber threats and supply chain disruptions, among other risks, are leaving organizations grappling with increasingly complex, large claims.

Global total insured losses from natural disasters alone reached $145 billion in 2024, well above the 21st century average of $90 billion. This steady climb is occurring alongside the growing interconnected nature of risks tied to the four megatrends of Trade, Technology, Weather and Workforce — intersections that contribute to claim complexity. 

In this environment, a proactive claims management strategy can help organizations build long-term resilience, while aiming to minimize the financial impact of losses. It can also help ensure rapid resumption of business activities in the short term.  

What are the Key Megatrends Claims Issues?

  • 01

    Trade

    Increase in claim values resulting from social and economic inflation, trade tariffs and litigation, as well as loss events across global supply chains

  • 02

    Technology

    Greater reliance on technology and resulting cyber risks, higher frequency of cyber claims and growing underwriting concerns over loss development from prior years

  • 03

    Workforce

    Managing workers compensation claims and associated costs, as well as the developing challenge of more complex workforce demographics

  • 04

    Weather

    Greater exposure to, and frequency of, catastrophic claims due to climate volatility

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The challenges of managing increasing claims volumes and complex claims in a dynamic environment underscore the need for subject matter claims expertise and a proactive, data-driven approach. By understanding and addressing the multi-faceted nature of risks and associated claims, businesses can build greater resilience and ensure a faster, more effective response in the face of adversity.

Mona Barnes
Global Chief Claims Officer

Claims Trends in North America 

Social inflation continues to dominate claims in the United States and Canada. Nuclear verdicts, litigation funding and aggressive plaintiff bar tactics are driving adverse loss trends for risks with U.S. exposure. There are a number of jurisdictions in the U.S. that are appealing to plaintiff firms due to the favorable awards emanating from them, including the Pennsylvania Supreme Court, Philadelphia Court of Common Pleas and Michigan Supreme Court, among others cited by the American Tort Reform Association.1

Social inflation is significantly impacting general liability, product liability and auto, with claims escalating and jury awards reaching unprecedented levels. However, “While litigation system abuse, nuclear verdicts and settlement inflation continue to be of significant concern in the U.S., the increased proactive and collaborative mitigation efforts of insurers, policyholders, brokers and defense counsel are a positive and encouraging development,” notes Mike Merlo, Aon’s chief claims officer for Commercial Risk Solutions in the United States and Bermuda.

Canada is also seeing the impacts of inflationary trends. “While there are many factors in Canada that mitigate the adverse litigation trends prevalent in the U.S., Canadian policyholders are under more scrutiny when it comes to the appointment and engagement of defense counsel. There has also been earlier involvement of insurer outside counsel,” says Brian Rosenbaum, chief claims officer for Commercial Risk Solutions in Canada.

Increases in natural catastrophe losses and claims due to climate change and other factors are highly likely to continue across the Americas. Total insured losses reached $113 billion in the U.S. in 2024, greatly exceeding the 21st century average of $58 billion. In Canada, four major natural catastrophe events in 2024 resulted in insured losses of approximately $5.6 billion, according to Aon's 2025 Climate and Catastrophe Insight.

A rise in the number and sophistication of cyber attacks, and the complexities associated with adjusting related business interruption losses, are likewise important focus areas for insurers in this region. However, an increase in claims frequency in 2024 and poor loss development in prior year claims have not altered the course of the buyer's market, which continued through 2024 for cyber liability insurance amid a well-capitalized and competitive environment.

27%

In 2023, there were 27 awards in the U.S. courts that totaled more than $100 million, alongside a 27 percent increase in $10 million awards.

Source: Marathon Strategies

Ongoing challenges in accommodating an aging workforce are also reverberating across workers compensation claims and associated costs in North America. “Organizations need to better understand the impact of health issues and care gaps on their workforce and claims costs,” says Joe Galusha, Aon’s North America leader of Risk Consulting. “The downstream effect on workers compensation medical and disability claims costs are staggering — one Aon study identified that workers older than 45 had 73 percent higher average claims costs and lost an average of 13 days more from a lost time claim than their younger counterparts.” 

In response, progressive organizations are leveraging health data to create prescriptive wellness programs, designing more accommodating work environments and improving claims management processes. 

Horizon Scanning: The Long-Term Fallout of Social Inflation

A trend toward higher claims costs due to inflation in North America will have an impact on upstream declarations and recovery periods in the near term. The increasing complexity in supply chain management due to tariff wars and changing dynamics will also have implications for business interruption claims.

“Particularly with second tier supplier exposure, some companies don't have visibility and therefore an understanding of their exposure — and consequently, how coverage responds to those events,” says Rob Cusack, Aon’s global claims preparation and valuation leader.

Additional challenging developments in the region include:

  • An expected rise in the frequency and severity of U.S. liability claims
  • Public sector liability claims that are increasing in both frequency and complexity in Canada 
  • Political and economic factors driving up auto and property claims costs
  • A demand for experienced, skilled claims professionals that exceeds supply

Claims Trends in Europe, the Middle East and Africa

Extreme weather has notably impacted businesses and society in Europe, the Middle East and Africa (EMEA), spurring claims activity. The region experienced a number of significant weather events in 2024, with the hottest summer on record causing extensive forest fires and extreme flooding events in Spain, Germany, Central Europe and South Africa. Insured losses totaled $19 billion for the year, well above the long-term mean. This trend is likely to continue amid growing climate volatility.  

In turn, organizations with operations in EMEA are increasingly concerned about natural catastrophe coverage and declarations. Many now have to think about supplementary cover for other elements of weather perils, such as flood or windstorm, and the related financial exposures. “We've seen some organizations come close to hitting their limits after certain weather events more recently,” says Michael Sgarlata, Aon’s practice leader for claims preparation and valuation in Europe, the Middle East and Africa.

The increased integration and intricacy of global supply chains add even more business complexity. Climate volatility and extreme weather events are disrupting global trade routes, impacting supply chain reliability and leading to financial losses. The interconnectedness of trade today adds complexity to the already-challenging exercise of mapping supply chains and mitigating exposures. It’s not uncommon for a weather event in one region to have downstream impacts on a business on the other side of the world. Therefore, understanding the full supply chain and having a diverse supply of goods where possible can greatly mitigate the effects of disruption. 

Ransomware is another key issue in the EMEA claims landscape. The number of cyber events reported in 2024 in the European Union (EU) jumped significantly, in part due to the increase in geopolitical tensions.2 Nation-state actors continue to use proxy groups for plausible deniability while cyber warfare tactics, which can be a means of pressuring governments that have publicly voiced criticism, contributing to the evolving cyber threat. The Russia-Ukraine war continues to bring additional risk factors, including espionage activities or business continuity issues from attacks on critical infrastructure and utilities.

Law enforcement crackdowns and the potential criminalization of ransom payments have seen bad actors turn to other targeting methods including business email compromise attacks and website spoofing. These actors are further empowered by artificial intelligence (AI) to write and execute increasingly sophisticated phishing emails and scams. Early in 2024, a UK employee made a transfer of $25 million following a video call with senior management. However, the employee had not been talking to his managers, but to deepfakes created by AI.3 

On the other hand, AI also presents opportunities to reduce claims life cycles and accelerate payments from insurers. Aon’s Strategy and Technology Group benchmarked over 100 claims operations and found the greatest opportunity to drive claims quality improvement resides in the phases of contact, investigation and settlement. Managing these areas of the claims process requires extensive human resources, in addition to manual, often repetitive tasks that are prone to duplication and error. Strategic use of AI can optimize these processes and result in faster insurance settlements.

Horizon Scanning: Preparing for More Severe Climate Risks

The increase in complex claims is prompting enhanced claims preparation and management strategies. 

In the near term, organizations in EMEA should focus on boosting their resilience to protect against flooding and other natural disasters, as traditional coverages may become inadequate. Parametric is one solution coming to the forefront in this landscape. Unlike traditional insurance, which indemnifies the actual loss incurred, parametric insurance is structured and priced on the probability of a predefined event occurring. 

With climate volatility increasingly affecting claims, underwriters are becoming more cautious, with caps on policy limits and a reduction in capacity for high-risk areas. This shift has led to increased interest in the London market for capacity among clients traditionally covered in the general commercial market. 

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As weather perils change, organizations have to think about their risk profiles and make sure that their policies are built to address what could be a significant claim or worst-case loss to a critical site.

Michael Sgarlata
Practice Leader, Claims Preparation, Advocacy and Valuation, Europe, the Middle East and Africa

Other key concerns with the potential to impact future claims in EMEA include:

  • A continued increase in damages awarded for UK long-tail disease cases, attributed to updated Judicial College Guidelines and inflationary pressures 
  • Insurers facing challenges from organizations as policy limits on underlying layers remain capped, leading to potential reliance on excess layers and increased costs
  • AI creating new threats and making cyber attacks more efficient and impactful  
  • The revised EU product liability directive increasing access to redress, with the expansion of collective redress in Europe likely to impact future liability claims

Claims Trends in Asia Pacific

The rising number of large and complex claims is putting pressure on claims resources for insurers in Asia, increasing the likelihood of a prolonged claims life cycle for large and complex claims. To add fuel to the fire, a scarcity of experienced claims professionals is contributing to coverage and quantum issues, while softening market conditions put pressure on claims costs, exacerbating challenges with large claims. 

Insurers are proactively addressing this by using new tools in their arsenal to manage claims, increasingly turning to technology to drive efficiencies and reduce turn-around times, particularly for low value and simple claims. This then helps to deliver an improved claims experience for organizations.  

A growing focus on claims performance is leading to deeper pre-loss discussions between insurers and clients in the region on the value of claims, enabling insurers to differentiate themselves through their claims value proposition.

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Insurers that embrace technology and develop talented claims professionals will be best placed to deliver on their promise to pay valid claims promptly.

Jamie Sparkes
Chief Claims Officer, Commercial Risk Solutions, Asia

In Australia, an increase in building regulation is impacting insurance following high-profile losses, such as Mascot Towers — the high-rise residential building deemed uninhabitable in 2019 after structural defects were discovered. The cladding crisis continues to create challenges, with a notable increase in liability and professional indemnity claims related to combustible cladding materials used in the construction of high-rise buildings. 

The number of class actions in Australia has also increased substantially. There are now around 1,000 class action claims in the Australian courts, with a rate of around one new case filed per week on average, according to Aon data.

Exposures to climate volatility and extreme weather vary between Asia and the Pacific. While the former is known for its vulnerability to natural disasters and has experienced a rise in the number and cost of catastrophic events, the latter has seen a relatively benign streak of catastrophe claims, with few large weather events in the region in 2024. An uptick in catastrophic events in Asia coincides with greater asset damage, in part due to rapid urbanization, the construction of buildings in flood prone areas and higher population densities.

The Divergent Impacts of Extreme Weather Across Asia Pacific

  • 5%

    Just 5 percent of losses in Asia Pacific were covered by insurance in 2024. A large portion of the losses was attributed to the Noto earthquake in Japan and Typhoon Yagi in China and Southeast Asia.

  • 42

    For the first time in 42 years, no catastrophe was declared by the Insurance Council of Australia during 2024. Insured losses in Australia were the lowest since 2004.

    Source: Aon’s 2025 Climate and Catastrophe Insight

Horizon Scanning: Managing Macroeconomic Conditions

Geopolitical tensions and economic volatility will continue to have far-reaching impacts on supply chains in Asia Pacific (APAC), affecting businesses even when direct damage to their assets is minimal. “In the Pacific, there has been a continued steady increase in claims costs stemming from frictional costs in supply chains, which has an impact on claims reserves and the overall cost of insurance,” says Mark Ronan, Aon’s chief claims officer for Commercial Risk Solutions in the Pacific.

A shortage of tradespeople available to repair and rebuild businesses swiftly in the region only adds complexity to the claims resolution process. Combined with the increase in complex claims, this could lead to delays in settlement, though insurers have shown they are more willing to negotiate on difficult claims due to market conditions.

Notably, deregulation is not on the horizon in Australia, though class action litigation is expected to continue.

Claims Trends in Latin America

Organizations in the region are becoming increasingly aware of the impact of natural catastrophe perils. Following Hurricane Otis in 2023, three major natural catastrophe events impacted Latin America over the course of 18 months, with the 2024 floods in Porto Alegre, Brazil, standing out as the most severe flooding in the region in the last 100 years. 

These events have resulted in:

  • Increased insurance rates
  • Higher deductibles
  • More complex business interruption claims
  • Pressure on reinsurance markets

Natural catastrophes are driving insurers to reassess risk. These events also emphasize the importance of cementing business continuity plans and accurately assessing asset valuations to manage potential future claims effectively. 

In Latin America, an increase in litigation funding is impacting the claims environment. “As insureds become more aware of the potential for large court awards, litigation funders are increasingly investing in both litigation and arbitration cases, adding pressure on insurers,” says Enrique Morata, Aon’s head of claims for Latin America.

Key economies like Brazil, Mexico and Colombia are embracing arbitration due to its efficiency and enforceability under the New York Convention, particularly impacting industries like motor insurance. Here, claims complexity is heightened by inflation and supply chain issues. Third-party funding arrangements, such as enforcement funding and award monetization, empower claimants to pursue complex cases against larger entities.4

The cyber threat landscape in Latin America is increasingly complex and sophisticated. Cyber attacks are becoming more frequent and targeting many industries, with claims ranging into millions of dollars. The threat mirrors global trends, with increasing interconnectedness making systems more vulnerable. 

$8.9B

Insured losses in the Americas (excluding the U.S.) reached $8.9 billion in 2024, above the 21st century average of $6.4 billion.

Source: Aon’s 2025 Climate and Catastrophe Insight

Horizon Scanning: Cyber, Climate and Class Actions Top Future Risks

Natural catastrophe claims are expected to increase in frequency and severity due to climate volatility, which in turn could affect coverage limits and pricing. 

Moving forward, organizations are becoming more aware of cyber risks as increasingly sophisticated attack methods emerge. The key cyber developments down the road will likely include increased penetration of cyber insurance, more specialized response teams and a growing need for comprehensive risk management strategies. 

The cyber insurance market is already maturing and learning to better address the evolving threat landscape in Latin America. Organizations increasingly understand and appreciate the value of cyber insurance. 

The trend of class action lawsuits is likely to continue, particularly where events impact larger groups. Looking ahead, the region may also see increased regulatory scrutiny and the development of standardized legal frameworks to manage the growth of litigation funding. 

4 Actions Organizations Can Take to Manage Claims Effectively

Experiencing any type of claim — whether from a natural disaster, an unplanned outage or a significant liability event — can be overwhelming, even for the most experienced risk managers. Depending on the region and its unique challenges, several strategies can help organizations navigate claim complexities:

  1. Work with an Experienced Broker to Ensure a Frictionless Claims Experience
    Organizations should work with an experienced insurance broker to carry out a full risk assessment, including analyzing claims trends using data and analytics across geographies and industries. Claims data, analytics and AI can help quantify potential losses and assess exposure gaps as a crucial first step. These tools can also provide insights into risk trends and improve claims processing efficiency and effectiveness. Moreover, they can inform risk transfer strategies post-recovery, helping organizations ensure that robust and adequate cover is in place before a loss occurs.

    The rise in an increasingly complex claims in particular highlights the need to partner with an experienced broker who can help clients work with insurers, lawyers and other third parties. Taking the right steps through complex litigation scenarios and understanding plaintiff bar dynamics and tactics can be the difference between resolving a claim or going to trial.
  2. Adopt a Holistic Pre-Loss and Post-Loss Claims Management Framework 
    Embed pre-loss workshop activities early to improve the overall level of preparedness when a claim happens. This includes partnering with the right insurers, selecting the appropriate loss adjusting and forensic accounting expertise, designing effective claims protocols and probable loss scenarios for stress testing, and implementing business continuity procedures so that businesses are back up and running as quickly as possible.
  3. Strengthen Supply Chain Understanding
    Review and evaluate the complexity of supply chains, understanding dependencies and assessing risk exposure. Diversification can help make supply chains more resilient, as disruptions can occur at various points and across multiple nodes that span regions. If alternative suppliers are available, organizations should implement diversification to ensure that a disruption in one node does not have a substantial impact down the chain. 
  4. Invest in Resilience Measures
    Implement strategies to bolster resilience against natural catastrophes, including physical protection of assets and emergency preparedness. Both governments and insurers are actively working to protect assets in increasingly vulnerable areas. However, it is also vital that chief risk officers recognize evolving exposures and purchase the right type and level of cover to effectively manage exposure to a large claim. Partnering with brokers and insurers who respond quickly and have pre-agreements with loss adjusting companies can help businesses resume operations promptly.

    In addition, staying up to date with the rapidly changing cyber threat landscape is essential. Training staff to spot phishing, malware, ransomware and deep fakes creates effective defenses, reducing the likelihood of a claim. Ensuring the right insurance cover is important for gaining immediate assistance and guiding businesses through the correct steps in managing such events.
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Organizations should consider the claim service, culture and performance record of their insurer. The speed and ease of resolving significant balance sheet threatening events and complex claims scenarios should be valued more than what might be a comparative modest premium discount. An engaged and collaborative claim response will be remembered long after modest savings are forgotten.

Martin Thomas
Global Head of Aon’s Complex Claims

As the four megatrends of Trade, Technology, Weather and Workforce — and their intersections — intensify the complexity and frequency of claims, it is imperative for organizations to adopt proactive and resilient claims management strategies. By understanding and addressing these multi-faceted risks, businesses can better navigate the challenges posed by natural catastrophes, cyber threats and supply chain disruptions, ultimately ensuring a swift recovery and sustained operational continuity.

Please contact us if you would like to learn more about accelerating the resolution of your insurance claim via our claims advocacy and claims preparation services. 

Aon’s Thought Leaders

Mona Barnes
Global Chief Claims Officer

Rob Cusack
Global Claims Preparation and Valuation Leader

Joe Galusha
North America Leader of Risk Consulting

Andrew Green
Global Claims Leader, Transportation & Logistics

Mike Merlo
Chief Claims Officer, United States and Bermuda

Enrique Morata
Head of Claims, Latin America

Jeremy Palmer
Global Claims Leader, Natural Resources

Robbyn Reichman
Global Claims Leader, Specialty Products

Mark Ronan
Chief Claims Officer, Australia and New Zealand

Brian Rosenbaum
Chief Claims Officer, Commercial Risk Solutions, Canada

Michael Sgarlata
Practice Leader, Claims Preparation and Valuation, Europe, the Middle East and Africa

Jamie Sparkes
Chief Claims Officer, Asia 

Tariq Taherbhai
Global Chief Commercial Officer, Construction and Infrastructure  

Martin Thomas
Global Head of Complex Claims

Clarence Ting

Global Claims Leader, Construction and Infrastructure


General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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