The property and casualty (P&C) claims process is more than an operational necessity — it’s a strategic lever for profitability and customer experience. Rising loss costs and market volatility are pushing carriers to rethink claims as a source of competitive advantage, leveraging technology, automation, and disciplined recovery to protect margins and create enterprise value.
Discover how leading firms are transforming claims from expense centers into engines of efficiency and growth — and how subrogation can become a core competency.
- What is the P&C claims market and why does it matter?
The property and casualty (P&C) claims market covers everything that happens after an event occurs — from first notice of loss — known as FNOL — through adjustment, settlement, and recovery. It’s the function that determines whether an insurer’s underwriting actually produces profit. In today’s environment, the claims organization has become a key competitive weapon driving carrier implementation of third-party technologies and services to enhance efficiencies.
Rising loss costs, inflation, and record catastrophe activity have forced carriers to look inward toward process efficiency, automation, and vendor management as margin levers. Even small improvements in cycle time or recovery rates can move the combined ratio several points and meaningfully change profitability.
Claims matter because they define customer experience and capital performance. The firms that can resolve losses faster, leverage technology intelligently, and recover more through subrogation don’t just protect margins — they create real enterprise value. - What are the key drivers in the marketplace?
Three themes stand out. First, volatility. Severe weather, social inflation, and nuclear verdicts have made losses more unpredictable. That volatility is changing how carriers think about staffing, outsourcing, and reinsurance. Flexibility — through external adjusters, catastrophe response partners, and data-driven triage — is now part of core strategy.
Second, technology. The claims process is being rebuilt through digital intake, AI image analysis, and automated settlements. These tools shorten resolution times and free up adjusters for complex cases. Early adopters are already seeing significant gains in efficiency and customer satisfaction.
Third, capital discipline. With investment yields normalizing and underwriting competition tightening, executives are focusing on cost control. Reducing loss-adjustment expenses, optimizing vendor networks, and improving recovery performance are now board-level initiatives — not back-office projects. - How are technology and AI being leveraged to automate the claims lifecycle?
Technology is quietly transforming claims into a data-driven function. Digital FNOL tools allow policyholders to submit photos and videos instantly, while AI models can estimate repair costs within minutes. The use of drones and satellite imagery are now standard after major storms, enabling remote assessment before adjusters even arrive onsite.
On the back end, analytics are identifying subrogation opportunities that were previously missed entirely. Instead of manually reviewing closed files, machine learning systems can flag recoverable cases automatically. The payoff is tangible — insurers adopting automation report faster turnaround times, lower adjustment costs, and higher retention. What used to be viewed purely as an expense center is now a driver of client experience and profit protection. - Pay now subrogate later — are you leaving dollars on the table?
Often, yes. Subrogation and salvage remain underdeveloped areas in the claims lifecycle. Many carriers still treat them as afterthoughts once a claim is paid, leaving material dollars unrecovered. The reality is that recoveries can represent several percentage points of paid losses — and for certain lines, like auto or property, much more. But realizing that value requires disciplined processes: clear referral rules, data analytics, and specialized adjusters who know when and how to pursue third parties.
The best organizations treat subrogation as an investment, not an add-on. They track performance, benchmark vendors, and manage it with the same rigor as underwriting or pricing. Those who do it well consistently generate meaningful margin benefit with limited incremental cost. - What are your chances of winning subrogation?
That depends entirely on process discipline. The industry average recovery rate is modest, but performance varies widely. Top-performing insurers and third-party administrators (TPAs) recover several times more than the median simply because they manage it proactively.
Early identification and pursuit make all the difference. If potential subrogation is not flagged within the first few weeks of a claim, the likelihood of recovery drops sharply. High performers establish clear workflows, use analytics to spot patterns, and incentivize adjusters to prioritize recovery. In practice, success is less about luck and more about structure. Companies that make subrogation a core competency — rather than a clean-up exercise — consistently outperform. - How can Solomon Partners help?
We are active advisors in the P&C Insurance Services sector for both capital raising and M&A. We pride ourselves on providing independent unbiased advice to our clients to drive successful outcomes throughout all stages of growth and market cycles.
Matthew Cornish is a Managing Director in the Financial Institutions Group at Solomon Partners focused on Insurance Services, Illiquid Financial Assets, and related sectors.
