2025 isn’t over yet, but it’s already Gallagher Re’s Natural Catastrophes and Climate Report Data show that in the first half of this year alone, global insured losses reached US$84 billion. At this rate, 2025 will be the fifth consecutive year that insured losses exceed $100 billion. All of this is evidence of the fact that the frequency and intensity of climate-related events such as floods, wildfires, earthquakes, and more have increased dramatically to almost unsustainable levels. Insurers are adapting to fundamental changes in underlying risk and loss patterns and how it affects the products and services they bring to market.
In the Asia-Pacific region and in New South Wales, Australia, where I live, the natural disasters we focus too much on tend to be floods and bushfires. According to the Australian Bureau of Meteorology, Total rainfall is approximately 330% to 630% of average rainfall August 2025 – the last month of winter in the southern hemisphere – will be an extremely wet month across Greater Sydney, with many areas recording record August rainfall totals. Historically, wet winters and dry springs have significantly increased the risk of bushfires in the summer. We already experienced a heat wave in the first two weeks of spring (September 2025). So we’re getting ready for what’s coming. Against this backdrop, governments and insurers are expected to take decisive action and demand compassionate claims services, as well as practical guidance on prevention and mitigation measures.
Poor claims service is a brand risk
Not only meeting but exceeding these customer needs has become a strategic imperative. In the age of social media and instant gratification, empathy, transparency and speed are top of mind. Poor claims service, especially when it comes to emotionally charged NatCat claims, is not only a customer experience failure but a brand risk.
Claims are emotionally critical times for customers, and insurance companies will deliver on their promises to alleviate pain when truly necessary. If claimants are let down, there can be real damage to the reputation and brand value of the insurance company. So despite the advances in AI and digital transformation, it’s disappointing to see this key Customer experience metricsCustomer loyalty/retention, effort score, satisfaction, and lifetime value have remained largely stable or improved only slightly over the past three years.
The insurance industry does perform better than the industry average in some areas, with 47% of executives saying customer satisfaction has improved over the past three years, compared with 41% across all industries. However, the insurance industry falls short in building loyalty (8% gap compared to all industries) and NPS improvement (-5%). This shows that while insurers are adept at delivering a positive initial experience, there are still key opportunities to strengthen long-term engagement and streamline interactions for ongoing success.
Insurance companies need to shift from a compensation mindset to a protection mindset.
Accenture’s Leveraging AI to transform claims and underwriting The report shows that between 2022 and 2027, up to $170 billion in premiums are at risk due to poor claims experience. Among claimants who are dissatisfied with their experience (31%), the top issues are settlement speed (60%) and settlement process complexity (45%). This dissatisfaction directly leads to customer attrition: 30% of dissatisfied claimants have changed insurance companies, and 47% are considering changing insurance companies.
Opportunities to transform today’s challenges into moments of customer satisfaction. Historically, insurance companies have been reactive – reacting to claims after a loss has occurred. But this paradigm is changing rapidly. Today, digital-first operators are adopting predictive and IoT-driven models that proactively prevent or resolve claims faster, reducing costs and improving customer outcomes. our Shining a light on insurance innovation The report, based on data from our years of sponsorship of the Qorus Insurance Innovation Awards, shows that the number of product innovation program launches tripled from 2019 to 2023. The future of claims isn’t just faster, it’s smarter, more predictive and pre-emptive. Leading operators will:
- Adopt proactive claims model—Using IoT, genAI, agent AI and data analytics. State Farm deploys IoT solution Tinga smart home plug-in that detects electrical fire hazards, reduces claim costs and improves customer protection.
- Redesign the customer experience-Build trust and loyalty, not just manage transactions. On the commercial side, insurance companies like AXA XL and Munich Re partners with WINT An AI IoT water management solution for construction sites and buildings designed to prevent water leakage damage and reduce claims.
- Invest in disaster recovery capabilities—Leverage automation and predictive modeling. Traditional models and manual workflows are struggling to keep up with the scale and urgency of today’s risk landscape. As a result, insurers are rethinking how they assess, price and manage catastrophe risk. Future-proofing insurers see resilience not just as a pricing issue but also as a product innovation opportunity. complete financial company Launched a pilot partnership with the Wildfire Defense System (WDS) to provide on-site preventive services (brush clearing, sprinkler deployment) as wildfires approach to reduce wildfire losses before claims occur.
- Champion a customer-centric digital model— Customized for speed and simplicity. For example, a property insurance carrier Australia Suncorp Winner of the Australian Financial Review (AFR) Artificial Intelligence Award for its application to the Ethics and Responsibility category A single view of the claims tool. The tool uses generative artificial intelligence to quickly reveal the status of a claim, including prompting Suncorp employees on the steps they should take to move the claim forward. It has generated 1.8 million claim summaries by processing 2.74 billion words.
80% of study respondents A joint Accenture-Qorus report tells us that their innovation projects met or exceeded their expected financial results. This number rises to 98% when it comes to non-financial goals such as customer engagement and satisfaction, brand strength and employee loyalty. In this context, IIn a world of rising risks and expectations, insurance is no longer just about managing losses, it’s about creating confidence. Insurers must take actionmaterialize Implement innovative preventive measures in policies and redesign the claims customer experience to truly meet customer needs. I would be delighted to discuss this great opportunity with you – please feel free to contact me Linked to.
special thanks Sachin Mathur and Sud Contributions to this blog from Accenture Research.
