Case:
Cost-out: A redesigned claims process brings significant cost savings for Danish company
Critical inefficiencies in the claims process meant that significant product flaws and customer complaints were often not addressed in the organisation. Thus, the same mistakes, claims, and costs were happening repeatedly to much frustration internally.
CoreConsult was appointed to analyze the cost-out potential and possible risks while also redesigning the claims process, governance model and guiding decisions on steering committee meetings. With more than 6000 employees operating across 10 markets with +12 brands, the optimization potential was significant.
Challenge: The total claims cost was becoming a burden
Engineers struggled to improve products due to poor-quality data on product errors. Claim tickets were often vague, lacking images, and incomplete descriptions. This led to wasted time searching for information rather than analyzing it.
Meanwhile, only 25% of claims were ever investigated. Faulty products continued to reach customers, creating a snowball effect of future claims, reputational damage, and decreased customer loyalty.
The situation worsened with an overwhelmed claims department drowning in cases. The backlog grew, response times lagged, and many claims were shelved without resolution.
Not only did their claims costs increase but it also prevented the company from recouping eligible reimbursements (“charge backs”) from suppliers.
Sales teams feared losing customers if they asked them to document product failures better.
Solution: Realigning the organization and joint KPIs
After conducting 50 in-depth interviews, 10 workshops, and multiple analyses across the entire international value chain, CoreConsult helped the company design and implement a comprehensive turnaround strategy for its claims process:
- Which product errors are driving up costs? The organization gained a clear understanding of the most frequent and costly failure types. This helped prioritize investments to reduce future defects.
- Redesigned process: A new four-step claims process was introduced, with well-defined roles, responsibilities, quality standards, and decision rights. The framework detailed exactly what data, images, and documentation were needed and which systems supported each process stage.
- Shared KPIs: Common metrics were defined across departments, aligning teams with a unified objective and reducing interdepartmental friction.
- Employee empowerment: The new setup enabled better use of staff capabilities, leading to increased job satisfaction and engagement.
- Increased accountability: Every department received specific, co-created performance goals – fostering ownership and a results-driven culture.
Result: Saving at least 25 percent of claims costs
The transformation is projected to deliver a cost saving of at least 25% of claims costs in 2025 alone – purely from improvements in the claims process. The coming years after will also bring significant cost-out.
Beyond the financial impact, the company now benefits from:
- Sharper product improvements driven by better data.
- Faster and more structured handling of claims.
- Improved internal collaboration and accountability.
- Higher employee morale.
- Stronger foundation for customer trust and long-term loyalty.
The overhaul not only addresses current inefficiencies but also prevents future costs from recurring claims – making it a strategic investment with long-lasting impact.
