Major industry claims trend report from Sedgwick

Sedgwick has released its Imagine 23 report of major industry trends and issues that are going to dominate the year based on a trend analysis conducted by the firm in late 2022. The report uncovers issues that employers, brokers, carriers, risk managers, human resources professionals and product safety experts should be aware of throughout the coming year. The wide-ranging report covers a number of topics, including property, climate change, compliance, loss prevention, technology and litigation strategies. According to Sedgwick, the property claims process is in a time of re-engineering, with technology playing a crucial role. The report talks of engineering new solutions for complex losses, noting that “programs are emerging that target specific, more granular loss types and enable us to pinpoint solutions – low-dollar flood repair, exact-match flooring replacement, specialty machinery restoration, cyber forensic analysis, picture AI for 3D home modelling and more.” It adds that technology “is modernising the way we hire and train adjusters, inspectors and contractors; how we work collaboratively and remotely across communities and countries; how we communicate and adjudicate the claims process; how we manage data, billing and reporting; how we triage, target and add value from first notice to resolution of losses; how we pinpoint the path to improved outcomes.” Sedgwick adds that technology will continue to transform the claims process, and specific tools will emerge that improve performance and outcomes at points in the cycle. On climate change, the report says extreme weather events will have a direct impact on claims volume for businesses and individuals, especially those located in vulnerable areas on the map. “As coverage becomes more challenging and more expensive in areas prone to catastrophes, we expect to see more of a shift to alternative risk methods. Data will support an increase in parametric insurance as we look to find options for increasingly volatile risks,” it states. The report highlights the importance of loss prevention: “For areas including product and workplace safety, recall preparation or property site evaluation, proactive assessments can make a difference between smooth resolution and costly remediation – or significant reputational impact… As both cost and availability of insurance coverage fluctuate, risk managers should feel empowered to lead their organisational efforts on risk avoidance and risk mitigation opportunities and be open to exploring programme options.” Loss prevention is also important in terms of litigation strategies, says Sedgwick. “Given the substantial impact and increasing frequency of litigated claims, organisations and their insurers are well served to allocate additional attention and resources toward avoidance and mitigation. It’s important to incorporate diverse tactics into your broader litigation management strategy. Consider ways to optimise your legal panel’s performance; to use settlements, subrogation and recoveries effectively; to engage end-to-end solutions from injury or damage through to litigation and recovery; to consider tools like e-discovery to simplify processes,” it says. The report also notes a focus on compliance, especially in relation to product recalls. “In the wake of a record-setting year for recalls and increased regulatory efforts and enforcement across the globe, we expect another year of scrutiny in product safety and compliance,” it states. “Businesses should constantly review and update their product recall, crisis and communications plans to ensure they can withstand the stress of a recall or other product safety issue.” It also points to big changes on the horizon around product liability, cybersecurity, AI and the regulation of online platforms, with a heightened awareness of the need for legislation to keep up with rapidly developing technology.

Major industry claims trend report from Sedgwick

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