As we venture into 2023, here are several issues our news team will be watching that could have an impact on the insurance claims space. While none of these are new, per se, they are definitely evolving and some are taking on more significance as lawsuits and larger claims come into play.
Cybersecurity — This a constantly evolving risk that changes as companies and policyholders become more vigilant in one area and force bad actors to move into other vectors. While we’re seeing a drop in ransomware demands, social engineering is becoming more popular for hackers and will be a risk to watch.
The great resignation — Much has been written about this issue and the pandemic has changed some retirement timetables, which could mean more job opportunities in an industry that is already short-staffed. Technology will help mitigate some of the losses, but new work models such as the use of gig workers could become more commonplace. Creative recruitment, partnerships with high schools, and internship programs will be critical to filling vacancies.
ESG risks — Environment social and governance issues are becoming a major priority for insurers, investors, and policyholders, however, risks related to them are also driving an increase in lawsuits against companies and leadership. Increasingly strong storms and an increase in wildfires will also attract more scrutiny to the environmental issues affecting these events.
Claims costs — The pandemic and its impact on the supply chain have had a global effect on everything from technology, auto replacement parts and building supplies, to basics like food and necessities. Reconstruction costs have increased significantly and even the ability to find needed supplies is delaying everything from auto repairs following an accident (or even just a regular breakdown) to restoration efforts following the hurricanes that decimated much of Florida last fall. The worker shortage is affecting how quickly repairs are made and the lack of replacement materials and both factors are contributing to increasing claims costs.
Claims technology — Insurtech and its adoption by claims professionals and policyholders has rapidly evolved over the last two years. Insureds who see it as a way to stay in contact with an insurer and be informed of delays or problems rate their satisfaction with the claims process higher than those who use more traditional methods for first notice of loss. For some property and auto claims, technology is the perfect solution to expediting the claims process, communicating with the insured and paying the claim quickly.
Excessive jury verdicts — An increase in insurance litigation is anticipated to continue, as are the excessive jury verdicts that have been awarded. As the courts reopen and over-crowded court dockets are addressed, the need to ensure that insurers and others are held responsible for perceived wrongs will continue to be reflected in jury awards.