The global insurance market is exploring ways to become more cost-efficient but a sustained policy of cost reduction in the past will make further efficiencies difficult to achieve.
International ratings agency Standard & Poor's said that although many markets were seeing improved insurance rates, it was likely that most insurers would still need to review and seek to improve their level of expenses.
Lower cost bases have become a necessity since the 11 September terrorist attacks on the US, which left insurers with lower levels of investment income and high claims.
As a result, S&P said, insurers were increasingly focussed on technical results, namely the ratio of claims to premiums and their level of expenses.
A director of Standard & Poor's financial services ratings Christian Dinesen said: "We expect to see some companies to implement significant changes as they take a much more detailed look at both internal and external costs in the wake of 11 September."
He added that distribution continued to represent one of the market's largest costs but many insurers had already opted for cheaper options. This meant support and consultancy roles were increasingly likely to come under scrutiny in the coming months.
Dinesen highlighted the use of external consultants, especially for IT, as a key target for cuts. Other areas such as marketing, human resources, and strategy are also expected to come under review.
Meanwhile, companies that have been involved in mergers and acquisitions over recent years are likely to pay particular attention to areas where there is a degree of crossover between business units.
Dinesen said the drive to reduce expenses could come at a price: "... it will be interesting to see whether the need to reduce costs will, in terms of IT, impair insurers' ability to operate efficiently on the world wide web. More generally, it will also be interesting to see if any expense reductions make companies less efficient and competitive."
The scope of the expected cost-cutting exercises is not expected to be limited to any particular market.
S&P said that although the losses from the events of September had weighed particularly heavily on non-life insurers, the downturn in investment markets had had a significant negative effect on a number of life insurance markets, which have historically kept a large portion of their assets invested in equities.
