The insurance claims audit: 7 hidden costs eating operations budget

Many insurers focus audit efforts on compliance and individual claim outcomes, but hidden operational friction in claims handling — such as repetitive data entry, inefficient payment workflows, poor prioritisation, brittle ecosystem handoffs, excessive training burden, and inadequate audit evidence — silently erodes productivity, inflates costs, and risks regulatory exposure. Systematic claims friction audits reveal these seven cost categories and quantify their impact on specialist claims operations, enabling prioritised improvements that reduce waste and strengthen governance. Tech leaders should treat friction audits as a strategic diagnostic tool that informs targeted process optimisation, architectural augmentation, and technology investment — not just regulatory compliance.