4 Cost‑Safe Insurance Operations That Don’t Break Quality

Insurance organizations are navigating a stretch where volatility, regulation, and cost pressure are showing up at the same time. In that environment, teams are rethinking not just what they spend, but how they structure work to maintain control and consistency. Let’s explore the patterns in cost-safe insurance operations we’ve been seeing as carriers adjust their operating models to meet that reality.

Predictability beats “cheap”

In conversations with carrier leaders and in recent reporting, we’ve seen a steady reframing of how operating spend is judged. “Cheapest” rarely wins on its own anymore. Executives favor models that can be explained, measured, and defended—predictable spend that won’t any function of an organization.

Market signals are reinforcing that shift. Verisk’s 2025 report puts global insured average annual loss at $152B, up $32B year over year, with “frequency perils” now accounting for about $98B, or roughly two‑thirds of modeled AAL. As loss‑cost baselines step up, carriers are focusing on levers they can control, such as cycle time and quality. In practice, cost‑safe operations that are governed and easy to approve tend to resonate more than discounts that fade fast.

What a “cost‑safe” hub looks like

Carriers have been experimenting with modular operating hubs that bring together elastic capacity, clean governance, transparent reporting, and first‑order cycle‑time improvements. While each organization tailors their model, we’ve seen four elements show up repeatedly.

1) Custom teams with variable scale (“surge pods” for Claims & Underwriting)

In peak periods, work can pile up faster than fixed teams are able to absorb. We’ve seen “surge pods” activated for Claims and Underwriting to flex up and down with clear triggers (incoming volume, aging thresholds, SLA risk). These pods are wired into the carrier’s existing playbooks and controls—not to create a parallel operation, but to add elastic throughput without long‑term burden.

It’s worth noting that mid‑year 2025 NAIC analysis associates improved industry performance with corrective actions and capacity discipline. This aligns with how boards tend to see flexible models—not as short‑term fixes, but as a reliable way to handle spikes from weather or regulatory changes.

How teams tend to structure it:

Claims pods focus on FNOL support, documentation completeness, follow‑ups, and QA sampling.
Underwriting pods handle submission triage, clearance, document chase‑downs, pre‑bind checklisting, and QA.
Capacity dials follow objective signals (e.g., 90th‑percentile aging or consecutive weeks of SLA drift), then ramp down when the signal normalizes.

2) A cost‑safe delivery model (clear roles, clean governance, transparent reporting… and no hidden lift)

“Cost‑safe,” as we hear it described, often means audit‑ready by design. Insurers frequently use the NAIC’s Market Regulation Handbook and Industry Snapshots as reference points so their documentation, testing, and evidence stay on track. When roles, processes, access, control checks, and KPI reporting are mapped to those standards, Compliance and Procurement reviews tend to move faster and with fewer surprises.

The U.S. Treasury’s Federal Insurance Office (FIO) 2025 Annual Report further emphasizes governance, risk controls, and documentation across P&C functions. We’ve seen teams use that framing to keep control design front‑and‑center as they adjust staffing models or introduce new tools.

What this often includes:

RACI (short for “responsible, accountable, consulted, informed”) clarifies who owns outcomes, who tests controls, and who certifies results
Monthly control checks (access, data handling, change logs, exception review) with evidence stored in one place
Transparent cadence: a weekly operational KPIs and monthly governance summaries that Finance and Procurement can validate

While governance often sits with Compliance, its impact is felt most in operations. Clear ownership and reporting help teams execute faster and with fewer interruptions.

3) Cycle‑time improvements you can see (backlog, throughput, quality)

With property severity elevated in 2024 (LexisNexis flagged a seven‑year high across perils), we’re seeing leaders lean into the levers they can influence: shorten the tail, reduce rework, and tighten QA. These gains can tell a clearer ROI story than trying to trim rates across the board.

On the tech side, Celent reported a sharp year‑over‑year increase in production GenAI adoption in 2025, particularly in claims and underwriting, with “material efficiency gains” when governance and measurement are robust. We’ve seen those gains show up in very specific tasks—document classification, summarization, case prep, triage support—paired with human‑in‑the‑loop QA and audit trails. This mix can reduce handling time without compromising accuracy.

Common scoreboard:

Cycle time (median + tail)
First‑pass yield / QA pass rate
Backlog days (by queue)
SLA adherence (by tier and risk)
Rework / supplement frequency (especially in claims)

4) The “Procurement Proof Pack” (controlled access, compliance posture, SLA discipline)

Procurement leaders often tell us their reputation is linked to how well vendors perform under scrutiny. The strongest hubs curate a “proof pack” that includes access logs, SLA definitions and breach workflows, exception/trouble tickets, monthly control test results, and a one‑page mapping to the NAIC Market Regulation Handbook. That artifact package can make renewals and audits far more predictable.

Why this approach is resonating now

According to the NAIC’s mid‑year read, the industry saw improvement in 2025 as organizations focused on corrective actions and tighter operational execution. That helps explain why executive teams tend to favor cost‑safe programs that are designed to be measured and attested, rather than large‑scale transformation efforts that are hard to prove quarter to quarter.

You can see this in carrier results as well: State Farm’s 2024 numbers (reported in early 2025) showed $5.3B in net income with a narrowed P&C underwriting loss ($6.1B) and a reduced auto underwriting loss ($2.7B). Leadership emphasized a state‑specific approach grounded in strong governance, reinforcing how operational discipline can help keep organizations steady during periods of volatility.

A Sustainable Operating Cadence

Different carriers tailor the approach, but several structural pieces pop up repeatedly in “steady” hubs.

Roles and RACI (less ambiguity, fewer escalations)

A clear RACI can prevent issues that otherwise surface late in audits or during crunch periods:

Carrier product owner sets priorities and signs off on KPI thresholds and exceptions.
Engagement lead on the partner side is accountable for SLAs, risk & controls, and reporting.
Pod leads drive queue‑level outcomes.
QA & Controls act as independent testers and publish defect/exception findings monthly.

RACI documents often map back to NAIC Market Regulation Handbook expectations, which can streamline exam conversations.

Sprint rooms, standard work, and visible work

Two‑week sprints with daily stand‑ups and shared visual boards become a default. SOPs, checklists, and guardrails (data handling, exception thresholds) are typically version‑controlled. That level of visibility can help Ops leaders connect day‑to‑day throughput to monthly governance and Finance narratives.

Weekly operational KPIs; monthly governance summaries

A weekly deck would cover: cycle‑time distributions, SLA adherence, QA pass rate, rework/supplement frequency, backlog days, any risk/controls incidents, and corrective actions. Monthly governance then rolls trends up for executives with baseline‑to‑current deltas and a bridge to financial language (e.g., cost per closed unit; leakage avoided).

Quarterly benefits tracking (Finance‑oriented)

We’ve seen Finance teams gravitate to a consistent set: (1) cycle‑time deltas, (2) QA pass deltas, (3) rework/supplements, (4) backlog clearance, (5) cost per closed unit, and in some cases (6) LAE signals. Having a fixed translation to dollars (fewer touches, fewer days outstanding, fewer exceptions) can make the story easier to repeat at steering committees.

Controls & audit as a monthly habit (not a scramble)

Monthly control testing with documented evidence (access lists, change logs, exception review, sample testing) may reduce last‑minute audit stress. We have also seen some organizations run a “mock exam” quarterly against relevant NAIC Market Regulation Handbook sections to accumulate artifacts as they go.

Responsible AI, in production, with measurement

With the increase in GenAI adoption in claims and underwriting, many teams we’ve met start with narrow use cases (document classification, summarization) and maintain human‑in‑the‑loop QA and explainability. These incremental improvements compound into shorter cycle times and more consistent quality.

Where this leaves teams heading into 2026

None of this reads like a silver bullet. But based on the data and patterns we’re seeing:

Volatility is the new norm. Teams are planning for swings as part of normal operations, with flexible capacity and clear playbooks in place before pressure hits.
When severity runs hot, cycle time and quality are the levers you control. Speed and first‑pass accuracy are where teams are focusing, because those are the areas that most directly influence cost, leakage, and customer experience.
Discipline and transparency win approvals and audits. Clear ownership, visible controls, and consistent reporting are making it easier for Finance, Compliance, and Procurement to say yes.
Responsible, measured AI accelerates what already works. Narrow, well‑governed use cases are helping teams move faster without creating new risk or audit complexity.
Through‑line for 2026: approve the explainable. The spend that gets approved is easy to explain, easy to measure, and easy to defend year after year.

If there’s a through‑line, it might be this: the spend that earns a “yes” in 2026 could be the spend that can be explained easily, measured weekly, and defended annually. That is the essence of “cost‑safe,” and it is becoming the preferred path for carriers.

With the pressures insurers are managing today, knowing when to spend becomes just as important as knowing where to spend.

The most effective investments are often backed by experienced professionals who can deliver impact quickly without disrupting established safeguards. Contact Insight Global today to see more about how we can help connect carriers with talent that brings the right mix of insurance expertise, operational discipline, and flexibility to support cost‑safe decisions when they matter most.