From increased regulatory oversight to AI-enabled fraud, and intensified customer focus to AI-powered processes: what are the trends driving claims management?

Claims are front and centre
On January 1st, Lloyd’s of London introduced a new set of principles to claims; commonly referred to as the ‘hurdle’ and designed to elevate standards across the market. This additional layer of expectation is not simply a compliance exercise; it represents a strategic shift in how claims are managed, measured and ultimately valued within the Lloyd’s market.

The new principles impact every aspect of claims service. They require claims handlers, TPAs, and loss adjusters to demonstrate enhanced levels of operational resilience, together with data integrity and transparency, adaptability to manage emerging risks and, crucially, customer centric outputs.

Most importantly, ratings to syndicates will now include a claims hurdle measurement. This means that the claims function, whilst always important as a differentiator, is now very much front and centre in understanding syndicate performance. And some see this new regime as a ‘once in a generation’ opportunity to transform claims from a frictional transaction-based service to a strategic lever.

Customers come first
The customer centric nature of Lloyd’s new principles is testament to the fact that consumer focus is not diminishing. So too are recent initiatives such as the FCA’s General Insurance Retail Roadmap, which outlines its views on the retail insurance market. It’s clear that the FCA is going to be far more active when it comes to treating customers fairly, and no one wants to fall foul.

Further emphasising customer focus was last year’s Super Complaint from consumer group Which, suggesting widespread issues with the home and travel insurance markets. And this has left its mark. At the same time, insurers are under scrutiny from government working parties that put value, communication and affordability high on the agenda.

The claims sector is now (some would say always was) key to client retention. And claims management that truly puts the customer at the centre of everything, that delivers on promises, caters for the most vulnerable and invests in the customer journey will win market share.

In short, customers increasingly expect more, and insurers need to demonstrate ‘retail standards’ of care across the board.

Technology is reshaping, but not dominating, the landscape Many in the claims management sector have progressed from asking the question, “Should we use AI?” to “How fast and safely can we embed AI in our operations?”.

Examples of successful AI deployment now range from agentic AI agents that triage claims and pre-validate documentation, to AI tools that screen bordereaux and resolve issues such as incorrect, missing or inconsistent information.

Developments like these will continue at pace, subject to testing and review. But it’s important to remember that automation is just part of the solution to ensure we allocate the right resource to the right claim at the right time: it’s not a panacea. We mustn’t forget the basics: the personal power of the loss adjuster to reassure the traumatised customer after a catastrophic event; the specialist visiting the scene of storm damage to make an accurate assessment; or the human expertise used to interpret policy wording in the wake of a complex claim. Technical know-how, commercial awareness and empathy will always be essential.

As the industry loses talent at the top to retirement, it’s also essential to keep attracting and training younger talent, and to focus on succession planning.  With claims now perceived as a strategic lever, regulators’ keen interest in operational resilience includes people strategies and development plans.
 

The impact of external threats
Some aspects of claims management are harder to control; not least external factors such as changing weather patterns, cyber threats, fraud and global instability. All are intensifying the severity and frequency of claims, with underinsurance often remaining an issue.

Examples aren’t hard to come by: in 2024, 50% of UK businesses experienced a cyber breach, rising to 75% for larger organisations. In 2025, fraudsters increasingly used AI to fabricate hard-to-detect fake images and documents in claims evidence. And, according to the ABI, weather-related claims are increasing 10% year-on-year. Meanwhile, the world remains an uncertain place, with geopolitical rifts impacting supply chains and driving costs upwards.

From developing tools that detect AI-generated anomalies in claims evidence, to analysing data holistically, to adopting a strategic approach to costs with “smart” procurement, the claims sector is countering the threat of surges.

Now, TPAs, loss adjusters and claims managers must continue to invest significantly in applications and people to ensure that customer focus is paramount.  The regulators and government will be watching.