2025 is not over yet, but it is over. Gallagher Re’s natural disaster and climate report It shows that in the first half of this year alone, global insurance losses have reached US$84 billion. At this speed, the fifth consecutive year of commemorative insurance losses exceed US$100 billion in 2025. All of this demonstrates that the frequency and intensity of climate-related events significantly escalates to nearly unsustainable levels. Insurance companies are adapting to this fundamental change in the fundamental risk and loss model and how it affects the products and services they bring to the market.
In the Asia Pacific region, in New South Wales, Australia, where I live, our over-index natural disasters tend to flood and bushfires. According to the Australian Meteorological Agency, The total amount of rainfall is about 330% to 630% of the average During August 2025 (the last month of the last month in the Southern Hemisphere), the entire Sydney is spread throughout Greater Sydney, making it an extremely wet month with August totals recorded in many areas. Historically, wet winters are followed by dry-clothing springs, greatly increasing the risk of bushfires in summer. We’ve been through the heat wave in the first two weeks of spring (September 2025). So we are ready for what is about to happen. In this case, decisive actions are being sought from governments and insurance companies and assertments of understanding claims services and practical guidance on prevention and mitigation measures.
Bad claims service is a brand risk
It has become a strategic necessity to not only meet these customer needs, but also meet these customer needs. In the age of social media and instant gratification, empathy, transparency and speed are the top priorities of the agenda. The poor claim service, especially in terms of emotional Natcat’s claims, is not only a failure in customer experience, but also a risk to the brand.
The claim is the emotional moment for the client when the insurer follows its commitment to alleviate pain when it is really necessary. If the claimant is disappointed, then the real insurance company’s reputation loss and therefore the brand value. So despite the advancements in AI and digital transformation, it is disappointing to see the key Customer experience metrics– Maintain loyalty/retention, effort scores, satisfaction and lifetime value – Over the past three years, essentially stable or only seeing moderate improvements.
The insurance sector has performed on average in some aspects, with 47% of executives saying customer satisfaction has improved over the past three years, compared with 41% of all industries. However, the insurance industry is not in order to promote loyalty (8% difference from all industries) and improvement in NPS (-5%). This shows that while insurers are good at providing positive initial experiences, there are critical opportunities to enhance long-term engagement and simplify interactions for sustained success.
Insurance companies need to change from a payment mentality to a protective mentality.
Accenture’s Change your claims and underwriting with AI The report shows that between 2022 and 2027, premiums up to $170 billion are at risk due to poor claim experience. Of the complainant’s unsatisfied experience (31%), the highest issues are the speed of settlement (60%) and the complexity of the closure process (45%). This dissatisfaction directly drives the churn: 30% of unpleasant claimants reject insurance companies, and 47% are considering it.
There is a chance to turn today’s challenges into moments of joy for customers. Historically, insurers have been reacting – responding to claims after losses occur. But the model is changing rapidly. Today, digital-first operators are adopting predictive and IOT-driven models that actively prevent or resolve claims faster, reduce costs and improve customer outcomes. Our Lighting insurance innovation According to our data on our sponsorship of the QURUS Innovation Award, reports over the years show that the launch of the Product Innovation Program has tripled in 2019-2023. The future of claims is not only faster, but also smarter, predictive and preemptive. The carrier of leadership will:
- Adopt active claims model– Use IoT, Genai, Agesic AI and data analytics. State Farm deploys IoT solutionsa smart home plug-in that detects electrical fire hazards, reduces claims costs and improves customer protection.
- Redesign the customer experience– Build trust and loyalty, not just managing transactions. In business, insurance companies like Axa XL and Munich Re and Wint cooperation AI-powered IoT water management solutions are used in construction sites and buildings, designed to prevent water leakage damage and reduce claims.
- The elasticity of investment disaster– Master automation and predictive modeling. Traditional models and manual workflows are working to keep pace with the scale and urgency of today’s risk landscape. As a result, insurers are reimagining how they assess, price and manage disaster risks. Insurers in the future see not only resilience as a pricing issue, but also as an opportunity for product innovation. Complete financial company A pilot partnership was established with Wildfire Defense Systems (WDS) to provide on-site prevention services (clearing brushes, sprinkler devices) when wildfires approached to reduce wildfire losses before claims occur.
- Champion customer-centric digital model– Ending with speed and simplicity. For example, P&C operators Australian Sunshine Awarded for its Australian Financial Review (AFR) AI Award for its application in the Ethics and Responsibility category Single view of claim tools. The tool uses Generate AI to quickly reveal the claim status, including steps that Suncorp employees should take. It has produced 1.8 million claims summary by processing 2.74 billion words.
80% of the study respondents In our United Accenture-Qorus report, their innovative projects meet or exceed their expected financial results. That number rose to 98% when it comes to their non-financial goals such as customer interaction and satisfaction, brand strength and employee loyalty. In this case, IIn the rising world of risks and expectations, insurance is no longer just managing losses, but building confidence. Insurance companies must take action to IncInduce Innovative precautions in insurance policies and redesign the claims customer experience to truly meet customer needs. I’m happy to discuss this huge opportunity with you – feel free to contact me Link.
