Contributor: Phil McGriskin, CEO and Co-Founder of Vitesse
Climate-driven disasters are occurring with increasing frequency. Once considered secondary perils, severe convective storms are now a routine concern for insurers, with total losses from natural disasters reaching $320 billion worldwide in 2024. The destructive consequences of these events, including hail, floods, and wildfires, are placing growing pressure on both risk carriers and their customers.
Meanwhile, rising global temperatures are fuelling more frequent and intense wildfires. The devastation they cause is immense: California, for example, recently experienced two of its ten most destructive wildfires in history, in terms of structures burned. All but one of those ten events have occurred since 2003.
With loss events becoming more frequent and severe, insurers are facing an evolving challenge. The industry has made significant strides in risk assessment, yet it continues to struggle in the area most critical to disaster-stricken policyholders: ensuring capital can be deployed swiftly and efficiently to pay claims.
The reality is that claimants are not just waiting for claims approval, they are waiting for their money to be made available. While the industry’s focus on refining risk modelling and underwriting are steps in the right direction, delays in claims payments remain a widespread challenge. Insurers must ensure that the funds required to settle claims are available and accessible when needed, rather than being locked in fragmented financial systems.
For too long, the operational processes surrounding claims payments have been under-prioritised. This, combined with rising claims frequency, has led to system inefficiencies and delays. Just as insurers have advanced their risk modelling capabilities, they must now modernise their financial infrastructure to ensure claims funds can move as efficiently as risk decisions are made.
Treasury and payment functions often remain disconnected, with funds trapped across multiple accounts and limited real-time visibility into liquidity. Insurers frequently rely on outdated financial systems, manual processes and traditional financial service providers that were not designed for the speed and complexity required in catastrophe response.
To enhance resilience, insurers must go beyond risk assessment and focus on financial infrastructure that enables capital agility. A more connected insurance finance value chain – one that provides real-time liquidity control, automated reconciliation, and treasury visibility – is essential for ensuring claims payments are made promptly when disasters strike.
The insurance industry rightly emphasises its role in supporting catastrophe resilience, but effective disaster response requires more than just robust risk models. To truly fulfil their promise to policyholders, insurers must embrace modernised financial systems that ensure capital can move swiftly and seamlessly where it is needed most.
Vitesse provides the financial infrastructure to make this possible. When insurers modernise their treasury operations, the benefits extend beyond efficiency – they support stability and agility across the broader industry
Now is the time for insurers to take action and modernise their insurance financial operations, before the next crisis occurs. Claims funds must be accessible, traceable, and deployable in real time. The future of insurance is not just about better risk assessment, it is about ensuring that capital moves as fast as decisions are made. With the right financial infrastructure in place, insurers can deliver on their commitment to protecting policyholders when it matters most.
