Insurance claims trends in 2023

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More claims  

It seems an obvious point to make, but it’s worth saying: there will be a rise in claims across all lines of business.  

Home, contents and motor insurance will likely seek increased claims as individuals will have a greater need to use insurance products as they increasingly feel the pinch.  

On the commercial side, there will be further claims under D&O policies as companies produce poor financial performances, and a growing number face insolvency.  

Fraudulent claims 

We are likely to see increased cases of insurance fraud, as more people turn towards illegal means to alleviate financial pressures.  

Some insurers have already seen a rise with Aviva reporting a 13% increase in 2021, and Zurich reporting a 25% rise in fraudulent property insurance claims from 2021 to 2022.  

This does not tally with ABI data, published in 2022, which  showed that on average detected fraud levels fell in 2021. However, the average value of a fraudulent claim rose to over £12,000 

We expect that the ABI figures for 2023 will unfortunately show an increase given the deteriorating economic picture.  

More aggressive legal tactics?  

With more claims being made, insurers may have an increased appetite to settle claims promptly where appropriate, to avoid increased costs. Equally, policyholders in dispute with their insurers in relation to policy coverage may seek quicker determinations as they struggle to balance rising costs (and acting as prudent uninsured in respect of third-party claims). 

We predict that there will be an increased reliance on Section 13A of Insurance Act 2015 (late payment of claims), and possibly use of the incoming Consumer Duty (link to article) to focus insurers’ minds on prompt resolution of coverage disputes. Please see links to our articles on these topics for more information.  


Underinsurance is likely to be a problem for policyholders who do not carefully consider the rising value of certain items, and rising costs of repair/replacement across various lines of business.  

Rising prices are causing valuations to fluctuate, and policyholders are not used to seeking regular re-valuations to ensure they are accurate. This will be a particular issue in the jewellery market, given the myriad of factors affecting prices including surging metal, diamond and gemstone costs, rarity of materials and currency fluctuation.  

We will see increased use of average clauses and more avoided policies,, if the insured has not made a fair presentation of the risk. For example, by either intentionally underinsuring, or recklessly or carelessly misrepresenting what something is worth.  

Increased cost of claims  

The increase in cost of materials caused by inflation, as well as increased global demand for products post-pandemic and the impact of the Ukraine War, will continue to impact on physical damage lines of business such as property and construction.   

Personal injury claims will also continue to be affected. The 16th edition of Judicial College Guidelines in 2022, used inflation to uprate guideline figures. The Ogden rate, which must be revised by 2024 at the latest, will also likely reflect inflationary changes. 

Increase in subrogated recovery claims 

We expect that the rising cost of claims will result in insurers trying to recoup as much as possible from responsible third parties, with renewed focus on the benefits of subrogated recovery actions. 

If you have any questions, read more and get in touch with our Financial Services team here.