Insurance Services: A Growing Need for Technical Specialists

Several trends are driving greater investment in claims management and expert services to the insurance sector. In the property and casualty insurance segment, businesses specializing in technical consulting, forensic services, and specialty engineering are in higher demand to efficiently resolve an increasing number of claims and disputes that are growing in severity and complexity. 

Here, senior professionals from our Business Services Group share key trends and growth drivers for outsourced insurance services, traits of leading companies, and the M&A strategies underway in the sector. 

Rising Claims Volume and Complexity

Insurance claims volume and overall value continues to expand, supporting resilient long-term demand for claims management, consulting, and other related services. Aging building infrastructure, ongoing new construction, and rising severe weather frequency are all meaningful contributors to steady claims volume and value growth. 

Source: The National Association of Insurance Commissioners, 2023 U.S. Property and Casualty Insurance Industry Results

These accelerating claims numbers are challenging insurers’ processing capacity, especially amid an ever-more litigious and complex claims environment. Due to these dynamics, there’s a stronger need for specialized third-party expertise in areas such as expert adjusting, forensic consulting, and specialty engineering services to manage costs and optimize processes. Such capabilities can be expensive to hire and maintain internally across disciplines and geographies, and outsourced providers offer the claims management experience and technical skills required for efficient, reliable support.

“Insurance services like forensic consulting can be highly attractive businesses for investors thanks to their sticky customer relationships and steady demand for their unique capabilities,” says Derek Lewis, a managing director. “We're seeing growing investor interest in top companies in the sector with plenty of M&A opportunity remaining.” 

Diverse, Quality Technical Expertise

Leading service providers to property and casualty insurers share several characteristics, one being geographic diversity. A balanced geographic footprint allows a provider to serve national customers while having the right resources available wherever an incident occurs. 

The best providers couple this broad geographic reach with a strong local presence. Building codes, construction, and maintenance can vary in any given community. Having knowledge and capabilities in these nuances is important to insurers, particularly when servicing complicated claims that require in-depth, on-site assessment of building and property damage. 

High-quality and expeditious service delivery is also crucial as insurers aim to minimize risk exposure and cost. “Insurers have strong demand for white-glove service providers with the technical expertise to resolve claims smoothly and avoid expensive litigation,” says Bryce Walker, a managing director. “Those companies with deep experience in a variety of claims, buildings, projects, and insurer needs will continue to grow and take share.” 

Building Scale

Claims services and management is a stable, resilient, and growing market. As claims activity expands and disputes become more complex, insurers will increasingly rely on third parties to investigate and help resolve claims. These trends bode well for the sector and pave the way for investors to build leading platforms with geographic scale, technology capabilities, and diverse service offerings.

“A significantly fragmented landscape of specialized providers creates the potential to build wide-reaching, multi-service platforms that can do more for clients,” notes Pete Morgan, a director. “Leaders in the sector are providing more value for insurers as favorable industry dynamics continue to bolster demand for claims-related services.”

To discuss companies to watch and emerging M&A opportunities in insurance services, please contact our senior professionals.