McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. Detailed information on the use of cookies on this Site, and how you can decline them, is provided in our cookie policy. By using this Site or clicking on "OK", you consent to the use of cookies.

Benchmarks Web

Claims Expense Study

Expense benchmarking helps insurers develop an understanding of the efficiency and effectiveness of their claims-handling process relative to peers.

The Claims Expense Benchmark provides clarity by looking at the overall performance and cost of processing claims for each insurer. Finalta uses raw data on an expense-level basis across all items of the value chain to ensure that all underwriting and operational differences have been accounted for.

Why it's important

Efficient cost management is critical for insurers in today’s markets. Especially for claims handling, insurers need to tailor their organizational structure to best serve their customers. Our robust claims expense methodology is combined with the expertise from our indemnity benchmarks to create unique insights and provide a holistic view of claims handling.

Insurers use our benchmark to address critical questions such as:

  • After accounting for differences in GWP composition and product lines, are we spending more to run our business than our competitors?
  • How much do we spend per FTE and how does this compare to average claim indemnity payouts in the market?
  • How effective are our people? Do we use more FTEs per claim than our peers?
  • How does our geographical footprint and organizational structure compare with peers and does it result in a cost advantage?
  • To what extent do our peers utilize external service providers and offshore operations and does it achieve a cost benefit?


Our unique methodology utilizes expense-level data to identify differences in performance. We examine expense items across the value chain with a focus on the claims function. We employ granularity to generate comparability, rather than manipulating data, to account for differences in risk mix and strategy. Our experienced analysts understand the trade-offs in claims strategies and help to identify opportunities in the context of each insurer’s individual needs.

Account for underwriting
and operational differences

Employ custom segmentation
to interpret results

Identify root causes
of cost differences