How a strategy-backed approach can help insurers optimise costs
Look Ahead: Insurance
With new and evolving risks challenging underwriting performance, and investment yields at historic lows, cutting costs has become imperative for insurers. As new entrants provide competition to existing business models and cost structures, insurers are having to find cost savings just to remain competitive.
All too often, cost reduction exercises are viewed in isolation, with leadership setting blanket targets unrelated to strategy. This approach can lead to missing targets, savings not matching areas of strategic focus, and a significant gap between corporate strategy and cost base.
Cost reduction should explicitly start with corporate strategy. Taking a strategy-backed approach allows Executives to understand their differentiating capabilities and better develop concrete, future-looking cost and investments scenarios, better understand the cost options available to them, and drive growth.