English
German
How do insurers remain profitable despite rising costs? zeb analyses show that effective fraud management can reduce an insurer’s combined ratio by up to 3%.
According to the German Insurance Association (Gesamtverband der Deutschen Versicherungswirtschaft, GDV), around half of non-life insurers have a combined ratio of more than 100%. In 2024, profits have developed in a positive direction. However, not all areas proved satisfactory. Continued claims inflation due to rising commodity prices, supply bottlenecks and higher wage costs as well as internal costs for staff and IT investments are having a negative impact.
In view of the intense competitive pressure, it is becoming increasingly difficult for insurers to offset costs through price increases. Active claims management is therefore taking a crucial role in stabilizing claims expenditure in the long term. However, many process optimization initiatives are falling short of expectations. A holistic approach to fraud management is particularly promising. zeb project experience shows that fraud prevention harbors considerable savings potential that can be leveraged with comparatively little effort.
According to the GDV, insurance fraud causes over EUR 6 billion in claims expenditure every year – around 10% of the overall claims expenditure. Almost one in ten claims is suspicious, and the damage caused by new technologies such as AI cannot yet be estimated.
According to our analyses, while some insurers are reducing their combined ratio by more than 3 percentage points, many are not fully leveraging this potential. Fraud management is not a mere nice-to-have, but a strategic lever for profitability and competitiveness.
However, it is not enough to simply implement individual measures or technical solutions. The strategy, processes, technology and staff have to be reconciled and dovetailed. What many successful insurers have in common is that they have embedded fraud prevention as a strategic goal and rely on a holistic operating model to achieve it. Based on market and project experience, zeb has defined key success factors for efficient and sustainable fraud management and helps insurers implement them in their specific settings.
Effective fraud management requires insurers to invest in their strategy, technology and organization – each building block plays a crucial role. Our zeb analyses show that insurers who master the success factors not only improve their combined ratio, but also strengthen their competitive position and react more quickly to new fraud methods.
We are convinced that insurers have to make fraud management a top priority in order to optimize their claims expenditure and protect the community of policyholders.
