In the insurance industry, much of our strategic focus is on risk selection, pricing, loss cost trends, catastrophe modelling, and customer satisfaction. Yet one of the most overlooked sources of risk is hiding in plain sight within your operational workflows. Companies track policy issuance rates, claims handling turnaround, and underwriting KPIs, but they almost never track the workarounds that make those numbers happen.
I’m talking about shadow work or insurance operation inefficiencies: the hidden, unofficial tasks employees perform to make fragmented systems actually work.
Reentering the same information because the two systems do not talk to each other.
Checking an old email to confirm why a decision was made.
Opening a document management system to find something you are fairly sure already exists somewhere else.
Pausing before approving a number because it looks slightly off, even though the system says it is valid.
Most insurance professionals would not describe this as broken work. It is just how the job gets done. The gap is not awareness at the practitioner level, but measurement at the enterprise level. This gap is the reason that their cumulative impact is largely absent from transformation economics and automation decisions.
Traditional KPIs ignore these hidden tasks. But they can be measured because they matter.
One of the most reliable starting points to measure insurance operation inefficiencies is structured time allocation analysis. This is not anecdotal shadowing or self-reported surveys in isolation. It involves mapping a defined underwriting or claims workflow and tracking where time is actually spent across systems, communication tools, and manual work.
This approach is already used in underwriting research. This kind of analysis was done by Accenture along with institutes in 2021. They reported that property and casualty underwriters spend around 40 per cent of their time on non-core activities. Yet in 2025, Commercial and personal lines’ underwriters both report about 35 per cent of their time on non-core tasks, which shows only modest improvement from three years ago.
Thirty-five per cent is not marginal. That number alone should give insurance leaders pause. It represents capacity that insurers pay for but do not fully use for risk selection, portfolio management, or judgment-based work.
Claims operations show a similar pattern. Industry studies consistently point to heavy manual involvement in claims handling, especially around document intake, validation, and reconciliation across systems. Even modest claims complexity can trigger repeated handoffs and manual checks when data is scattered across platforms.
Accenture's 2025 claims research highlights $100B+ in potential U.S. efficiency gains from fixing ops silos.
None of this is new information. What is missing is how we connect these numbers to daily behavior inside the underwriting and claims teams.
More of Interest: Why Many Insurance Carriers Are Losing Younger Commercial Customers
Those 35% non-core hours are not abstract. They show up in the P&L as constrained capacity rather than a clean expense line. For a commercial lines underwriter earning an $85,000 base salary, shadow tasks absorb roughly $30,000 worth of productive time per FTE each year. For a small regional carrier with 25 underwriting FTEs (full-time equivalents), that translates to about $750,000 of underwriting capacity tied up in non-core work. This underwriter productivity loss capacity surfaces indirectly through slower submission turnaround, delayed binds, increased overtime, and elevated execution risk as decisions are compressed under time pressure.
Claims process's hidden costs paint a tougher picture. Manual doc reconciliation uses up 40% of adjuster time.
Insurance platforms, legacy or modern, thrive or falter on their ability to make data flow without friction. Many core replacements technically modernize the stack but leave the nature of work unchanged.
The most common failure is that systems are modernized individually rather than as a coherent work environment, making real-time, shared data across the insurance lifecycle difficult. Platforms that operate on a unified data model allow underwriting, policy, billing, accounting, and claims to access the same information without reentry or reconciliation. This matters because a large portion of shadow work comes from verifying whether data is current, complete, or consistent across systems. Platforms such as SimpleINSPIRE have a unified system that is event-driven. A policy change functions as an event that propagates across underwriting, billing, and downstream workflows in real time, with manual intervention required only where the carrier explicitly defines it.
Second, modern platforms replace legacy document handling with intelligent document processing embedded directly into workflows. Basic OCR has been table stakes for years and does little on its own to reduce effort. What reduces shadow work is the ability to ingest unstructured submissions, extract and validate data, and immediately apply it to underwriting or claims workflows without offline handling. When an insurance application becomes a live electronic submission within seconds and flows directly into quoting and rating, underwriters stop compensating for system gaps with manual data transfer. This is where solutions like SimpleINSPIRE’s application ingestion capabilities are relevant, not because they scan documents, but because they eliminate the handoff entirely.
Finally, exception handling must be visible and measurable. Modern platforms surface exceptions within the workflow rather than pushing them into informal channels. This allows insurers to see where work deviates, why it does so, and how often it occurs. Over time, those insights drive design changes that remove the root causes of shadow work instead of normalizing them.
The common thread across these capabilities is not automation for its own sake. It is the removal of conditions that force employees to compensate for system limitations. When platforms are designed this way, shadow work does not just shrink. It becomes unnecessary.