The Nordic insurance market has the lowest combined ratios in the world, and other insurers want to know why. Steen Wung-Sung has a good answer. He spent almost 20 years at Nordic insurer Tryg, working across finance, HR and claims. That experience gives him a rare, cross-functional view of how people, technology and financial management combine to drive performance.
We asked him what insurers and MGAs elsewhere can learn from the Nordic approach. We also wanted to know how claims transformation becomes a strategic asset that builds loyalty and strengthens combined ratio.
Why Nordic insurers lead on combined ratio
Combined ratio is one of the strongest measures of insurance performance, and Nordic insurers consistently top the global rankings. Tryg, Scandinavia’s largest non-life insurer, reported an 80.3% combined ratio in 2025, among the best in the market.
Other insurers naturally want to copy this. Wung-Sung doesn’t think they can copy the Nordic model outright. Large incumbent insurers built the region’s advantage on scale, data and direct customer relationships. They don’t carry the broker and MGA complexity found elsewhere. Culture plays its part too: Nordic customers trust companies and digital services more than most.
“The Nordic region is a little bit special,” he says. “We have a tradition of being efficient, but also of trusting each other and the institutions and systems around us. That trust supports customer loyalty, because people are more willing to remain with organisations they believe will treat them fairly.”
What insurers elsewhere can copy, he argues, is the management discipline behind that performance. And claims, he says, is the best place to start.
Claims: an overlooked lever for combined ratio
“Underwriting and pricing discipline will always be fundamental to combined ratio,” he says. “But many insurers underestimate how much claims can also contribute. Satisfied customers stay longer, buy more products and become some of the insurer’s most profitable customers. Claims can strengthen that loyalty while cutting handling and indemnity costs at the same time.”
Wung-Sung has seen this play out first-hand. Depending on an insurer’s starting point, portfolio and resources, a well-executed claims transformation can improve combined ratio by one to three percentage points net. That’s after the insurer funds the capabilities it needs to sustain the improvement.
From digital trust to disciplined claims transformation
The same trust that gives Nordic insurers their edge also made these countries early adopters of digital services. That made it easier for insurers to roll out digital customer journeys. But Wung-Sung is clear that high digital adoption doesn’t create business value by itself.
“Digitalisation only creates value if it changes the way you operate,” he says. “It enables automation, creates better data and supports new customer journeys. But technology alone does not improve combined ratio. The real question is whether you use technology, data and people to manage the business better.”
For Wung-Sung, the real opportunity starts when insurers stop simply digitising old processes and start managing what he calls the claims triangle. That triangle covers customer satisfaction, claims handling cost and indemnity cost.
The claims triangle: satisfaction, cost and leakage
“Straight-through processing gives customers speed and certainty, two of the strongest drivers of satisfaction,” he says. “For the insurer, full automation cuts handling cost, while consistent, data-supported decisions reduce the human variation that drives claim leakage. The challenge is to optimise all three dimensions at the same time.”
This means insurers can’t treat claims transformation as a one-off technology project or a headcount-reduction exercise. It needs an operating model where claims, technology, data, finance, risk and frontline operations work towards the same business outcomes.
Make straight-through processing the default, not the exception
Wung-Sung sees one of the biggest barriers to claims transformation in a principle that sounds sensible. Insurers are told to automate only “where it makes sense”.
“Individual judgement and different perceptions of risk often drive what ‘makes sense’,” he says. “That might work when you’re assessing one claim or one process. But data-supported decision principles scale in a way that opinions never can.”
Instead, insurers should start with the outcome they want. Speed drives customer satisfaction and retention, and full automation delivers real handling efficiencies. That makes straight-through processing the logical default, provided it doesn’t create poor customer outcomes or push up indemnity cost. Insurers can then build evidence-based exception rules for the claims that genuinely need a human.
“STP should be the rule, but not an unconditional rule,” he says. “The data must show where the balance point lies across the claims triangle. Where human intervention creates a better overall outcome, take the claim out of the automated flow.”
That takes structured quality assurance: A/B testing and continuous measurement. Together, they let insurers compare manual and automated claims handling across the full claims triangle. This is the evidence that shows where automation works best, and where a human adds more value.
Optimise people, don’t just cut headcount
Technology isn’t the only place insurers can create value; people matter too. That’s why Wung-Sung tells insurers to look at their whole workforce when they optimise the claims triangle. It’s not just about the headcount automation can replace.
Insurers should reduce manual claims handling where automation performs better. But they may also need more specialists in loss adjusting, fraud, subrogation, data quality and claims performance management.
“Insurers tend to focus only on reducing the workforce,” he says. “But look at the data. If a specialist generates several times their cost through reduced leakage or higher recoveries, hire more people in that area.”
As automation takes on more routine claims handling, the claims professional’s role also changes. Insurers need fewer people to process standard claims. But they need more specialists to manage complex claims, assess risk, improve decision models and monitor how automated processes perform.
That’s why Wung-Sung believes the business, not IT, must own claims transformation, delivered in close collaboration with technology teams. Technology enables the change, but the business owns the outcome: the balance between customer experience, handling cost and indemnity cost.
What can insurers and MGAs take from the Nordic model?
Insurers elsewhere might argue that the Nordic market’s structure and digital maturity make its combined ratios impossible to match. Wung-Sung agrees that insurers can’t copy every structural advantage.
But they can copy the underlying management principles. Treat claims as a strategic lever, and make automation the default design choice. Build reliable quality and leakage measurement, and invest in the right mix of technology and human expertise. Continually balance customer satisfaction, handling cost and indemnity performance.
Digital claims also generates structured data that can improve underwriting, pricing, product design and customer retention. That strengthens the case for treating claims as an asset for the wider business, not an isolated operational function.
“Based on my experience, a well-orchestrated claims transformation could improve the combined ratio by one percentage point. That’s once you’ve funded the capabilities needed to sustain the change,” Wung-Sung concludes. “With the right operating model, data foundation and human expertise, the improvement could be as much as three percentage points.”
Insurers and MGAs face tight margins, rising customer expectations and mounting pressure on indemnity cost. For them, the Nordic lesson isn’t simply to go digital. It’s to manage claims as a strategic asset.
Ready to put this into practice?
Insly gives insurers and MGAs the automation and data foundation to run a claims transformation like this, without a multi-year systems rebuild. Book a demo to see how it works for your book of business.
