Insurance forecast 2023: claims trends and future risks

Drawing on our experience across multiple business lines, this 2023 insurance forecast report highlights some of the key trends that we anticipate will shape the insurance agenda for 2023 and beyond. 


The global insurance market is no stranger to significant unanticipated events, including the catastrophic effects of natural disasters. The losses sustained as a result of such events means that the sector has to adapt, by reviewing the scope of cover it provides, the manner in which it approaches risk assessment and how it prices its products in order to continue to remain relevant and thrive in a global marketplace. The potential threats of today mean that insurers need to understand and prepare for the risks of tomorrow.

The experiences of recent years suggest that unexpected events are becoming increasingly widespread. Our analysis reveals specific key drivers prevail: environmental, social and governance (ESG) risks, geopolitics, technology change and claims inflation. Alongside ever-present natural disasters, the industry continues to navigate the aftershocks of the COVID-19 pandemic, as well as the war in Ukraine and the current economic climate.

Consequently, understanding the key trends driving claims activity across different lines of business is vitally important.

Gaining insight from recent claims experience and embracing innovative technology should afford insurers and reinsurers the opportunity to identify and implement more effective loss prevention measures.

Key trends

The report examines the risks related to these key trends, including the relevant regulatory and legislative developments to watch.

Environmental, social and governance (ESG)

How effectively all businesses, including insurers, are perceived to address ESG requirements, such as their corporate disclosures, will increasingly impact the competitive position and reputation of those businesses in the marketplace. As such, embracing sustainability goals as part of a business’s own corporate governance is vital, and requires a sound understanding of the ESG regulatory landscape.

In this report, our corporate affairs director, Deborah Newberry, highlights in this report that “Pressures from ESG-related factors will impact every aspect of an insurer’s business; from their own investments and levels of claims, to the treatment of their customers and employees. Effective, technology-driven stress testing of products and procedures against ESG standards will be essential to helping insurers and their customers mitigate ESG impacts. Looking forward, regulatory pressure is set to increase in force and complexity, and to spread globally. The EU and other world leaders are no longer leaving choices to legislators, but rather will ramp up the regulatory landscape. Climate change and biodiversity loss will be a particular focus of regulators, as two of the most pressing issues. Overall, the return of the ‘visible hand’ is here to stay for at least the next decade. Prudent businesses should, therefore, take ESG far deeper into their global value chains and embrace the opportunity to ascend the ESG maturity curve in order to create value".

Our report considers the classes of business most at risk of impact, highlighting issues such as workers' rights, synthetic chemicals and supply chain management.


The impact of geopolitical risks – those risks associated with conflict or tension between countries or states - can be felt across almost all lines of business. There is also a clear interrelation between the geopolitical landscape and other priority topics for insurers, including rising inflation, ESG considerations and reputational risk.

Providing her insights into the impact on supply chains, partner Ingrid Hobbs states that "If manufacturers are unable to obtain ingredients or component parts from their regular suppliers and are forced to source those products from unknown third parties with whom they have no trading history, this raises the possibility of unreliable or inferior products entering the supply chain. A consequence is that those manufacturers may release finished products into the stream of commerce with quality issues, increasing the risk of product liability, recall and contamination claims developing where there is a risk of injury or damage as a result of use or consumption of those products".

The report also considers the ongoing impact of civil unrest, the rise in insolvencies and cyber risks.


Innovation through the use of technology is poised to continue transforming the insurance industry and the businesses that it serves, facilitating growth and furthering broader ESG-related objectives.

In this report, we delve into the risks associated with cybersecurity, the metaverse and data privacy, as well as looking at the regulatory and legislative developments around data protection and artificial intelligence. 

Claims inflation

We are currently experiencing the highest rate of global inflation for decades. While there are signs that prices are expected to ease in 2023, additional factors will mean that the impact of claims inflation will continue to be felt across all insurance lines in the year ahead.

In this report, we consider the impacts of inflation on the London Market and, to assist predicting direction of travel, we identify some of the factors driving excess claims inflation in 2023.

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