The latest report from Crawford & Company indicates that the frequent occurrence and increasing severity of extreme weather events are reshaping the global insurance claim environment. Disasters caused by climate change have become the “new normal”, intensifying the volatility of the insurance industry. Meanwhile, the rising costs of construction materials and labor, coupled with supply chain issues and the impact of international tariffs, have further pushed up the total cost of claims. Strict reconstruction standards in some areas have also prolonged the claim period and increased expenditures.
The report shows that by 2025, 31% of enterprises list business disruptions as a major risk. This trend stems from prolonged downtime and increased losses caused by natural disasters and supply chain disruptions. To address the challenges, Crawford suggests using catastrophe modeling, satellite images and AI technology to optimize loss assessment, especially to distinguish the damage stages in consecutive disaster events. The company also emphasized the need to enhance talent cultivation and technological investment. It is expected that by 2025, more than half of the claims processing will rely on automated or AI tools to improve efficiency and handle complex cases.
In 2024, the global economic losses from natural disasters reached 320 billion US dollars, with only 140 billion US dollars covered by insurance, highlighting the severity of development in high-risk areas and the impact of climate. Crawford’s president, Rohit Verma, called on the industry to break through traditional methods and respond to the rapidly changing claims environment by expanding underwriting capacity and innovative solutions, especially in developing economies with low insurance penetration rates, in order to narrow the increasingly prominent protection gap.
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