Strategic Claims Management: Taking Claims From an Operational Necessity to a Strategic Asset

The Role of Claims in Creating Strategic Advantage

The effective management of claims is one of the most central capabilities in the insurance value chain.  It is the “moment of truth” – where brand promise becomes a lived customer experience. Whilst the most successful insurers and MGA’s recognise it as a core capability, it is not always fully leveraged as a source of competitive advantage.

Strengthening claims capabilities across all activities is costly - and not all investments will drive equal returns. The key lies in identifying which levers to pull and where you can move the needle to align improvements with the broader strategic priorities of the business.

Strategic Enabler, Not Just Operational Improvement

Critical though claims is, it may not always be appreciated as a key strategic enabler for the business as a whole. Claims excellence should not be considered in isolation; it must align with and serve the insurer’s strategic goals to create genuine advantage. Claims is a critical component in delivering growth, diversification of product or distribution model, as well as customer excellence and leading on cost containment.

To do this effectively requires:

• A clear understanding of target customers and product objectives.

• A deep assessment of the maturity of your claims proposition – across processes, technology, culture, talent and capability.

• An understanding of how your competitors are performing, what “best in class” looks like, where you benchmark and what your gaps are.

  
  

With this insight, leaders can focus investment on the most impactful areas, to build a claims capability that is a true strategic enabler.

Where Claims Creates Differentiation, and Where it can Falter

Strategic claims management and the three levels of service.

The three levers of service, cost containment and efficiency remain fundamental pillars, but their weightings have shifted and what once differentiated a claims proposition is now often just table stakes. The next generation of advantage comes from how these fundamentals are reimagined.

1. Driving Efficiency - From Artificial Intelligence to Agentic Agents

Across many lines, 30–50% of handlers’ time in claims processing is still consumed by non-value tasks, such as document handling, data entry and chasing suppliers.

Intelligent automation and AI can release teams to redeploy their skills in higher-value activity, whilst increasing efficiency and creating additional (virtual) resources. Yet adoption in insurance lags other sectors – often due to legacy systems, complex and fragmented processes, competing priorities or cultural inertia and cynicism.

Insurance leaders are right to be cautious: poorly executed automation can quickly erode empathy, inflate indemnity spend and damage trust - all of which risk significant financial and reputational costs.

But as agentic AI becomes reality, the pace of change is accelerating. Technology that was a differentiator, will soon be a hygiene factor. The winners will match technology with their people strategy – combining deep domain expertise, unique data assets, and human judgement to elevate performance.

Of course, insurers are no longer competing solely against each other. Several tech-driven brands have already successfully challenged traditional models. Whilst few have yet achieved sustained profitability, when success does come, the bar will be raised and the industry will have to shift at pace.

2. Service as a Renewed Differentiator

Post-GIPP, the UK market is seeing lower churn in retail lines such as motor and home. Renewal prices are less volatile, and the ease of accessing online reviews means that claims experience is now both high-visibility and differentiating.

Consumer Intelligence data shows that whilst a poor claims experience negatively impacts retention, a great claims experience has a disproportionate benefit on customer retention. So, as price competition flattens, delivering a claims settlement service that is memorable for the right reasons is once again becoming a defining factor in customer churn.

The reverse is of course also true. With greater transparency, weakness in the customer’s claims journey can quickly erode brand trust and fail to meet customer expectations . And disengaged or dissatisfied customers not only cost more to serve, they can also negatively impact indemnity spend. In contrast, customers who feel valued and supported tend to engage constructively, enabling good outcomes but with greater cost control. Service excellence and spend discipline are complimentary – not opposing – forces!

3. Claims Data as a Source of Strategic Insight

Claims data, when connected to underwriting, pricing, and product design, can be a powerful source of competitive intelligence.

Early insight into factors such as peril trends, fraud patterns and inflation can inform more proactive pricing and reserving decisions. Direct feedback from customers and suppliers can highlight product weaknesses or opportunities for innovation. The differentiator isn’t the data itself — it’s how quickly and effectively it can be turned into action to determine who prices in or out of risk ahead of the market. Delivering meaningful action can manifest across product, pricing, underwriting, distribution and more but it’s the Claims data that’s one of the key enablers.

4. Supply Chain Strategy as a Value Lever

The supplier ecosystem, from loss adjusters and repair networks to technology partners, underpins claims cost control, efficiency and customer experience.

Typically, a significant proportion of claims spend - potentially a majority - will go through an external supply chain. A robust claims procurement strategy is essential, and can yield substantial savings in indemnity spend, but it also presents risk if over-indexing on cost alone — eroding quality, inflating rework, and damaging NPS.

Controlling spend whilst promoting service consistency and brand differentiation is a difficult balance and delivery through a complex network of supplier partners further enhances this risk. Building Claims as a true strategic asset requires investing in supply chain management to enhance collaboration, transparency and brand alignment.

5. Culture and Governance: Two Sides of the Same Coin?

Culture is so fundamental to an organisation that singling it out here risks stating the obvious; without the right cultural foundations, even the best designed strategy, process or technology will be undermined.

Effective governance is just as critical – to channel culture into consistent delivery, but also to provide the visibilitytransparency, discipline, and accountability to expose where it might be lacking. It provides the transparency, discipline and accountability that healthy cultures embrace (and weaker ones will resist). They don’t just monitor performance; they surface issues early, drive ownership and ensure corrective action is swift and effective.

Claims is a complex, time-critical environment. The effectiveness of the operation can be undermined quickly, but it takes far longer to recover; poor processes or decisions can have a significant financial impact and remain embedded in claims portfolios for months or years, prolonging adverse performance long after the cause has been addressed. Culture and governance, working in tandem, can prevent and mitigate these lapses – instilling continuous improvement as an essential part of an organisation’s DNA.

Delivering the Strategy with Effective Claims Fulfilment Management

Once the role of Claims in delivering strategic objectives is clear, insurers face a delivery choice: build in-house capability, partner through a TPA, or adopt a hybrid model.

Each route has different implications for control, cost, agility, and cultural alignment:

• In-house: greater control, deeper customer insight, and the ability to build a distinctive proposition.

• Outsourced: rapid access to scale and expertise, lower capex, but risks a lack of differentiation, brand dilution and reduced oversight.

• Hybrid: Retaining complex or high-touch claims internally while outsourcing low-value processing is increasingly being adopted to balance cost control versus quality of customer experience.

  
  

There is no single right answer and the optimal mix depends on a combination of product complexity, volume, and the insurer’s appetite for investment and oversight. A structured capability and gap assessment can ensure that operating model choices align with long-term strategic goals.

How Camelot Help with Insurance Claims Management

At Camelot, we help insurers and MGAs unlock the strategic potential of claims — connecting operational delivery with business strategy to create lasting competitive advantage.

Our experts combine deep claims leadership experience with cross-sector insight to help you:

• Review strategic objectives and identify areas reliant on Claims capabilities

• Highlight untapped growth opportunities enabled by enhancing Claims capabilities

• Define and deliver a strategic claims roadmap aligned to business goals.

• Optimise operating models, automation strategies, and supplier ecosystems.

• Build the insight, culture, and customer experience that turn claims into a brand asset.

  
  

We tailor our approach to each client’s context, offering flexible, collaborative models that deliver measurable impact.

If you’d like to explore how to make your claims experience a true strategic enabler for your business, we’d be delighted to talk.

About the authors

Chris Hazell has spent 20 years in the insurance industry advising business leaders, executives and Boards at major insurers. Chris has led internal Strategy and Corporate development teams in the insurance industry and worked as an external consultant.

Stephen Walker has over 20 years’ experience leading award-winning claims and customer operations. He has driven strategy and major transformations across leading UK insurers and now works with insurers and solution providers as an independent consultant.