Most insurers think they have a cost problem. They don’t.
They have a complexity problem.

I keep seeing the same pattern:

Costs creep up…Nothing obvious explains it…
And leadership keeps looking at the usual suspects – claims, fraud, pricing.
But the issue sits somewhere else entirely. Inside the way the business actually runs.

Where the real cost sits

Not in big decisions – in everyday friction.

1. Too many hand-offs

A simple process turns into 5-6 touchpoints.
Best operators automate 70-80% of flow.
Many insurers are still below 50%.

2. “Exceptions” that aren’t exceptions

25-40% of cases in many insurers need manual intervention.
At that point, it’s not an exception. It’s the system.

3. Manual overrides everywhere

Overrides are supposed to be safety valves.
When that happens: rules stop mattering, outcomes get inconsistent, costs become unpredictable

4. Governance overload

Multiple approvals for low-risk decisions.
I’ve seen processes where the cost of approving exceeded the value of the decision.
That’s not control. That’s drag…..

Why it matters

This isn’t just inefficiency.
It affects: speed, provider relationships, customer experience, and ultimately margins
The difference is real: Highly streamlined insurers run 5-10 points lower expense ratios than peers.
That’s not optimisation. That’s structural advantage.

The shift required

It’s actually simple (but not easy):
• Re-enginner processes end-to-end, not by function
• Reduce hand-offs aggressively
• Treat every exception as a design failure
• Cut unnecessary approvals

My Final thought

You can’t optimise a system that’s fundamentally over-complicated.
Fix the complexity, and the cost problem largely solves itself.