The intricate web of insurers, adjusters, and contractors responsible for putting lives back together after a loss is straining under the weight of its own fragmented design, signaling an overdue reckoning for the entire claims industry. For decades, the sector has operated on a model where each stakeholder functions within a well-defined but isolated role, passing a claim from one silo to the next. This assembly-line approach, once a benchmark of efficiency, is now the primary source of friction, delays, and escalating costs in an environment demanding unprecedented speed and transparency. The consensus is clear: the era of “business as usual” has definitively ended, and the industry stands at a critical juncture where it must either fundamentally reinvent its collaborative framework or risk becoming obsolete.
The End of Business as Usual
The traditional claims model is being pushed past its breaking point, not by a single issue, but by a powerful convergence of external pressures. The established system, characterized by hand-offs between claims handlers, loss adjusters, and contractors, is proving fundamentally incapable of meeting modern demands for agility and customer-centricity. What were once considered minor operational cracks have widened into systemic failures, revealing a structure ill-equipped for the complexities of the current landscape.
This inflexibility has created an environment where incremental improvements are no longer sufficient. The very foundation of the claims value chain is being challenged by forces that its architects never anticipated. As these pressures intensify, the industry faces a stark choice: cling to familiar but failing processes or embrace a radical overhaul of its operational philosophy. Continuing down the current path is not just inefficient; it is an unsustainable strategy that jeopardizes both profitability and the core promise of customer restoration.
An Industry Under Siege by External Forces
The challenges facing the claims sector are multifaceted and relentless. Economically, persistent inflation has driven up the cost of materials and labor, while prolonged supply-chain disruptions have extended repair timelines from weeks to months. These factors create a volatile environment where initial estimates quickly become outdated, putting immense financial pressure on insurers and frustrating policyholders who are left waiting in limbo. The economic strain is not a temporary fluctuation but a new reality that the old transactional models are not designed to manage effectively.
Simultaneously, a profound shift in consumer behavior has rendered legacy systems obsolete. Today’s customer, described as “completely different” from previous generations, operates in a mobile-first world and expects the same seamless, on-demand service from their insurer that they receive from retail and technology giants. This expectation clashes with an industry still grappling with slow technology adoption. The growing gap between the availability of advanced tools like AI-driven assessments and VR-based evaluations and their inconsistent implementation across the industry highlights a critical disconnect from the very people the sector aims to serve.
The Silo Effect of Internal Fragmentation
At the heart of the industry’s struggles lies the “silo effect,” a deep-seated internal fragmentation where key stakeholders operate in near-total isolation. Insurers, contractors, and loss adjusters often work toward the same ultimate goal—resolving a claim—but “carve their own route to a solution” with little to no real-time coordination. This disconnected approach fosters an environment of mistrust and inefficiency, where each party optimizes for its own metrics, often at the expense of the overall claims journey. Information fails to flow freely, leading to duplicated efforts, conflicting assessments, and avoidable bottlenecks that delay resolution and inflate costs.
This fragmentation creates a paradox of innovation. The industry is not suffering from a lack of new ideas or technologies; brilliant solutions, from self-service claims platforms to sustainable building materials, are continually emerging. However, their potential is squandered because they are implemented within individual silos rather than across the entire value chain. An innovative tool adopted by an insurer may fail to deliver results if the contractors on the ground are not equipped or incentivized to use it. This misaligned and inconsistent adoption means that even the most promising advancements fail to achieve systemic impact, leaving the industry stuck in a cycle of piecemeal progress.
A Call for Unity from Industry Experts
A clear call for a new operating model is resonating throughout the sector, championed by industry leaders like Tony Derbyshire, head of the UK network for Crawford Contractor Connection. Derbyshire articulated a widely held view that the core problem is not a lack of innovative capacity but its misaligned and inconsistent adoption. The current system, he argued, encourages individual entities to pursue their own solutions, a strategy that is proving increasingly ineffective. The result is a patchwork of disconnected efforts that fails to address the industry’s systemic challenges.
The proposed solution requires a fundamental shift in mindset: moving away from a series of disconnected, often adversarial transactions toward a unified ecosystem built on shared principles. This new model would be founded on a platform of shared goals, outcomes, and, crucially, shared risks. By aligning the incentives of every participant in the value chain, from the first notice of loss to the final repair, the industry can begin to function as a truly integrated system. Such an approach fosters genuine partnership and transforms the claims process from a contentious negotiation into a collaborative mission.
A Roadmap for Building an Integrated Future
The transition toward a collaborative ecosystem requires concrete structural changes, beginning with the agreements that govern relationships between insurers and their supply-chain partners. Outdated contracts, often defined by punitive penalty clauses and rigid, isolated key performance indicators (KPIs), must be replaced with true partnership models. These new frameworks should be designed to encourage mutual success, where the profitability and reputation of all parties are intertwined.
This structural evolution necessitates a redefinition of success itself. Instead of measuring performance through isolated metrics—such as an individual adjuster’s caseload or a contractor’s cycle time—the focus must shift to collective goals. Shared KPIs centered on the total cost of the claim, the overall time to resolution, and, most importantly, the policyholder’s satisfaction score would create a powerful incentive for all stakeholders to work in concert. When everyone is measured against the same holistic outcomes, the artificial walls between them begin to crumble.
Ultimately, this transformation is a cultural imperative that must be championed from the top. Leadership across the insurance and contractor sectors must actively dismantle organizational silos and foster an environment that rewards cross-functional cooperation and fresh thinking. It is about more than implementing new software or rewriting contracts; it is about rewiring the industry’s operational and cultural DNA to support a strategically integrated system.
The path forward for the claims industry was not presented as a theoretical ideal but as a strategic necessity. The discussions made it clear that continuing with fragmented operations was a direct threat to long-term viability. The choice that remained was whether to actively build a collaborative future based on shared success or to be passively dismantled by the relentless pressures of a new economic and technological era. The industry’s ability to survive and thrive was seen as entirely dependent on its willingness to abandon its silos and unite around a common purpose.
