Loss Adjusting Report Keys on Trends Shaping Property Claims

Tariffs, immigration policies, climate change and artificial intelligence are transforming the property claims landscape, and new report delves into some of those changes and how claims professionals should adapt to them.

Sedgwick produced the first in what is planned as an annual Loss Adjusting Insights Report, which examines trends shaping commercial and residential property claims in 2025.

The report offers a look at how forces such as global trade policies, climate-driven catastrophes, tariffs, labor shortages, artificial intelligence and shifting customer expectations are impacting the property claims landscape. It also outlines steps for carriers, contractors, brokers, and claims professionals to adapt to a changing market.

According to the report, the tariffs on Canadian and Mexican goods have the potential to raise U.S. construction material costs by more than $3 billion, increasing the cost of building a single-family home by $7,500 to $10,000.

“The looming threat of tariffs and restrictive immigration policies are creating new challenges and uncertainties for the construction industry,” the report states. “While there’s been a surge in nonresidential building spending in recent years, the latest forecasts indicate that a slowdown is imminent as the industry braces for an increased labor shortage and price hikes.”

The report also calls out climate change as a potential driver of change that claims and other professionals should take note of. In 2024, weather-related events caused $368 billion in damages worldwide, driving rising premiums and creating “insurance deserts” in high-risk regions, according to the report.

“The rising frequency and cost of severe global weather events is placing unprecedented pressure on the insurance industry,” the report states. “As billion-dollar catastrophes become more common, insurers are finding it increasingly difficult to manage risks, leading to higher premiums and reduced coverage options.”

It also points to climate change as making wildfires, such as the destructive L.A. wildfires in January, more likely. A key factor in fires in California this year has been the overlap of the dry season with the Santa Ana winds, which caused the fires to spread quickly in the high-wind conditions, according to the report.

Lastly, the report keys in on the global AI insurance claims processing market, which reached $514 million in 2024 and is projected to hit $2.7 billion by 2034. This market is expected to transform everything from risk assessment to remote adjusting.

“Artificial intelligence (AI), machine learning and other technologies are pushing the boundaries of what’s possible within the insurance industry,” the report states. These technologies have far-reaching applications in enhancing risk assessments, streamlining claims processing and detecting fraud. By embracing them, insurance companies are paving the way for a more responsive, accurate and personalized approach to insurance services.”