The insurance claims space is in flux, evolving with technological advancements, legal turbulence, and rising customer expectations. Pete Macdonald, Chief Claims Officer at Munich Re Specialty – North America, told IB that while he’s seen a lot of change in his 20 years in the sector, that transformation has really sped up recently — especially around litigation, customer expectations, and business alignment.

“There have been pretty dramatic changes in customer expectations, particularly around speed. It used to be you´d order from a catalogue, and something would come in a couple of weeks or a month. Now, if I don´t have it by the next day, or even that afternoon, I´m a little disappointed. Similar expectations have crept into all areas of our lives as consumers, including the handling of insurance claims.

“[In regard to business alignment], the closer aligned we in claims are with our internal and external business partners, the better decisions we´re going to make about risk selection.”

And the litigation environment continues to change. “I cannot think of any time since I’ve been in the business where the litigation environment has actually gotten better — in the pretty recent past, a number of factors have made it much worse.”

Together, these pillars — legal dynamics, service speed, and cross-functional alignment — form the modern foundation of claims management. And, as the volume and velocity of data increase, technology also becomes both a necessity and a differentiator. Importantly, for Macdonald and for Munich Re Specialty, technology is about enabling — not replacing — human judgment.

“We’re certainly gathering more data on our claims — the challenge is figuring out what’s the important information to capture in order to inform business decisions and customer decisions,” he told IB. “We spend a lot of time here on data governance, making sure that as we´re asking our professionals to capture more data, that we know what we´re asking them to capture is relevant. We´re trying make it easier for adjusters. If technology can help us figure out data that´s in an unstructured format from claim notes, that helps our adjusters focus more on getting great claims outcomes and taking care of our customers.”

One of the biggest challenges shaping the legal environment is the rise of legal system abuse.

The implications for insurers and the insured are serious. As Macdonald explained, most juries presume there is insurance standing behind the loss for the defendant — but very few would understand that, on the plaintiff side, there is third-party litigation financing.

“That means a large percentage of money awarded is not going to the victim but to a combination of the plaintiff’s attorney and an investor,” he told IB.

Incredibly, according to the U.S. Chamber of Commerce’s Institute for Legal Reform, the current tort environment adds more than $6,000 in costs per year to the average American family of four. Here, Macdonald’s team isn’t standing still. Their defense strategy has evolved tactically and strategically to deal with rising legal complexity.

“We have a very extensive vetting process to make sure we have a number of experienced voices weighing in on strategies,” he explained. “We’re evolving our panel of outside lawyers, looking more and more at how those lawyers tell the story about our insureds. We work together with panel counsel to make sure the case they’re putting on is responsive and anticipates the tactics plaintiff counsel are now using.”

Preparation is paramount. “We try cases, and we try them successfully. Our witnesses are ready to tell their story. [What’s more], we have people who understand the business of our insureds and we will continue, even in this environment, to defend them to the best outcome.”

So, what’s the secret to staying competitive in the current market? For Macdonald, it boils down to the right people and enabling platforms.