Reenvisioning insurance expense management has been saved
Perspectives
Reenvisioning insurance expense management
Prepare for the future with expense-minded solutions
In the face of industry pressures, unprecedented economic volatility, and pandemic-related challenges, insurers are expected to realize greater operational efficiency while investing in new technologies, capabilities, and products. Explore how focusing on insurance operating expenses can help companies enhance their expense management capabilities to optimize margins and sustain profitability.
Mounting pressure on the operating expenses of insurance companies
Insurers face a challenging environment. They must constantly invest in new technologies to harness the wealth of available internal and external data to gain better insights and compete in shifting markets. Changing customer expectations, brought about by shifting demographics, preferences, and buying patterns, are driving product evolution and the need for supporting operational shifts. Nontraditional competitors have accelerated entry and the rise of new, innovative business models. Continued regulatory changes require significant investment in sales standards, accounting, tax policy, cybersecurity, and privacy protection.
Compounding these pressures, the economic impacts of the COVID-19 pandemic are becoming more widespread each day, with limited clarity as to when or how a recovery will take shape. The economic contraction has already caused significant unemployment globally. And insurance regulatory authorities and government bodies are reacting to protect policyholder interests and reduce negative consumer outcomes. Economic shocks and service delivery challenges, coupled with shifting regulatory and compliance burden, continue to be major areas of focus for insurers across sectors during the pandemic.
Expense management can help insurers respond, recover, and thrive
In the face of these challenges, insurers should refocus and enhance their expense management capabilities to optimize margins and sustain profitability, regardless of top-line fluctuations. Integrating near-term operational improvements to reduce insurance operating expenses, along with embedding a sustainable culture of expense management in financial planning and analysis (FP&A) processes, will allow insurers to manage continuity, preserve margins, and make strategic choices to emerge stronger from the crisis.
By leveraging a Respond, Recover, and Thrive approach, insurers can move quickly and thoughtfully to address immediate policyholder and employee needs before introducing policies and processes to more effectively manage insurance operating expenses and enable a sustainable, cost-minded culture.
Respond, Recover, and Thrive approach
Expense management: A key to recovery
Laying the foundation for future recovery and sustained operational excellence is key for insurers. Organizations should focus on dealing with the present, managing continuity, and making strategic choices to emerge stronger from the crisis with a plan and structure that sustains an expense-minded culture.
Deloitte can help organizations identify, validate, and refine opportunities through our rapid, data-driven diagnostic assessment, which can help guide an organization’s strategy to manage costs.
Get in touch
Hanif Sidi Principal Deloitte Consulting LLP hsidi@deloitte.com +1 312 486 3707 |
Gina Vargas Senior Manager Deloitte Consulting LLP gvargas@deloitte.com +1 212 313 1725 |
Fahad Salah-Ud Din Senior Manager Deloitte Consulting LLP fsalahuddin@deloitte.com +1 313 394 5575 |
Kamalika Gangoly Manager Deloitte Consulting India kgangoly@deloitte.com +91 971 788 8180 |
Nic Barnett Senior Consultant Deloitte Consulting LLP nbarnett@deloitte.com +612 397 4516 |
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