Property claims are under increasing pressure from climate-driven catastrophes, shifting trade policies and rapid adoption of artificial intelligence, according to Sedgwick’s first Loss Adjusting Insights Report.
The findings point to mounting challenges for insurers, reinsurers, and intermediaries as they adapt to rising claims costs and more complex risks.
The report stated that weather-related disasters caused $368 billion in damages worldwide in 2024. The severity of these events has contributed to higher premiums and the emergence of “insurance deserts” in high-risk regions where carriers are scaling back or withdrawing coverage.
For reinsurers, the trend adds to catastrophe exposure and complicates renewals, while primary insurers face difficult decisions on underwriting appetite and pricing.
Meanwhile, newly implemented tariffs on Canadian and Mexican goods are expected to add more than $3 billion to US construction costs.
Sedgwick estimated that building a single-family home could now cost $7,500 to $10,000 more, a development that feeds into claims inflation for insurers covering property damage and catastrophe losses. Rising replacement costs may also drive disputes over policy limits and increase pressure on loss adjusters to manage expectations between carriers and policyholders.
Technology is another driver of change. The global market for AI-driven claims processing, valued at $514 million in 2024, is projected to reach $2.7 billion by 2034.
The report highlighted that AI is already streamlining risk assessment and enabling remote adjusting, but the pace of adoption raises questions about regulatory oversight, data governance, and workforce training. For insurers and brokers, technology investment is becoming a key factor in delivering competitive claims service while controlling expenses.
Sedgwick said the convergence of these factors is creating greater volatility in the property claims environment.
The report also suggested that carriers and intermediaries review their risk models, reinforce supply chain partnerships, and expand technology use to maintain efficiency and manage costs in a shifting market.
