Designing a new, lower-cost Target Operating Model for a UK-based mutual insurer

Client need

Our client was planning a major cost reduction programme. To maximise the benefits, it needed help in designing a new Target Operating Model (TOM) while ensuring it maintained its strong corporate values and market-leading customer service.


The key challenge for the client was to refine its TOM to enable a step-change in operational effectiveness, while simultaneousness safeguarding its ‘secret sauce’ – including an unrivalled quality of customer service and high employee engagement.

Focused plan and key actions

We used a Fit for Growth approach to undertake a comprehensive analysis of the client’s cost base, identifying potential savings and risks. Working closely with the client, we then designed a new TOM and a detailed roadmap with specific initiatives delivering targeted cost savings. The designs were driven by guiding principles which went beyond financial targets, and included preserving the client’s customer proposition and organisational values.

Seeing it through

The client’s executive team was provided with a fact base outlining the real costs of different parts of the business, and a detailed ‘cost journey’ to a future ‘right-sized’ organisation. This journey included about 30 specific initiatives over a specified timeline and milestones. The client also benefited from alternative organisational structures complete with related pros and cons, including implementation challenges and interdependencies between cost reduction initiatives.

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