Have you ever asked yourself, “Why is it so hard to get things done here?”
In legend, Alexander the Great stopped trying to untangle the Gordian Knot thread by thread and found a bolder path. Insurance leaders can’t reduce complexity overnight, but they can use a reinvention mentality to redesign the way work gets done.
Imagine an insurer where it’s easy to get the job done and nothing stands in the way. Decisions are clear, progress is visible and talented people can focus on creating value.
For insurers, reinsurers, brokers and other intermediaries, complexity increases over time. Acquisitions are only partially integrated, regulation is evolving, and the technology inventory is growing. Long-tail books, outdated policies, local market differences, and multiple distribution models add layers. In the life, retirement and pension sectors, decades of product history and maintenance obligations add another dimension to the back book.
Complexity is rarely the result of poor decisions. Sutton and Rao describe the resulting burden as a “friction tax”: meaningful additions accumulate until the organization becomes harder to navigate, harder to change, and harder to perform.
Why simplification is important
Simplification reduces costs, strengthens risks and controls, accelerates change and improves service.
Costs fall sustainably when companies get to grips with fragmentation, duplication, manual work, exception handling and unnecessary layers of management. This goes beyond another annual cost “haircut”. It asks more difficult portfolio questions: Which products, markets, processes, systems and meetings still deserve their right to exist? What should we stop doing?
Simpler processes and cleaner data also improve decision quality, which is critical in underwriting, actuarial, claims and reserving areas. By simplifying the decision-making environment, experts gain more scope to make informed judgments.
For customers and agents, simplification improves the experience by eliminating repeated requests for information and interrupted handoffs and speeding up quoting, onboarding, claims and renewals.
Why it’s not easy to just be
Insurance is inherently complex. The principle of “required diversity” is important: organizations need enough diversity to meet the complexity of the markets, customers and risks they serve (e.g. insuring a complex one-off infrastructure investment or event). This is not about standardization for its own sake. The goal is to standardize the high-volume, high-control core while maintaining differentiation where it creates value, wins business and retains customers.
Human behavior also stands in the way of simplification. “Addition bias” means that we naturally add rather than subtract. A new approval, committee, report, product variant, or control often feels safer than removing an old one. This is especially true when leaders deliver good results within their function, company or country, but lead to duplication of effort.
This is why reinvention is important.
Four ways to reduce unnecessary complexity
- Lead as a steward of others’ time
Ask what burdens can be taken care of by underwriters, claims teams, actuaries, brokers, consultants and operational colleagues. What consumes energy without improving customer, risk or business outcomes?
Make complexity reduction measurable: product variants, systems, forums, approvals, exceptions and handovers are removed. Give managers explicit responsibility to reduce them.
At a large Asian insurer, product teams implementing modern technology and agile delivery continued to encounter organizational tensions. Leaders formed a cross-functional “broom squad” from IT, business, finance, risk, human resources and procurement to remove blockages that no single team could solve. Around 70% of the portfolio was converted to a product-based model and the change accelerated.
- Reinvent work to make it easier, not just simpler
End-to-end redesign of value chains. Start with the future value you want to create, then consider the work, workforce, technology and AI required to deliver it. Agent AI in particular can help reinvent, automate, and expand work, but it should not automate existing complexity.
At a global insurer, we simplified underwriting work and reduced risk criteria by almost half before introducing agent AI. Processing time dropped from three days to about 15 minutes, review coverage increased from about 20% of broker submissions to 100%, and revenue increased about 50%.
- Build an empowered mindset
Give employees permission to override outdated processes, remove unnecessary controls, address root causes, and navigate the organization more easily. Recognize subtraction as a courageous behavior and a worthwhile outcome that needs to be recognized and rewarded.
Small changes like the words we use can help. The insurance industry is awash with “jargon monoxide”: acronyms and jargon that make it difficult to navigate already complex organizations. Clearer language, better onboarding and simpler ways of working help people understand the business, collaborate and adopt a business perspective. For example, at a large insurer, we develop its executives, from the C-suite to value stream owners, to demonstrate entrepreneurial thinking and individual responsibility.
- Make every change reduce complexity
The insurance industry is subject to continuous change, with product and value stream models emerging in large parts of the industry. These models can reduce complexity by embedding persistent multidisciplinary teams and aligning funding around consistent priorities and values rather than isolated projects.
Make removal part of the definition of done. When you start a new process, you retire an old one. When you introduce a new control, remove unnecessary controls. When you use AI, first simplify the path and decision logic. Transitional states are essential in major transformations, but must be accompanied by a commitment not to leave a half-finished outcome. For example, in our pension administration operations for clients, as we implement waves of operational, technological and AI changes, we are also simplifying things to improve service and efficiency.
All leaders can drive simplification changes. For example, you can perform cross-functional friction checks, prioritize the biggest blockers, visibly remove them, and repeat. Treat simplification as an ongoing management discipline.
Cut the knot
Across insurance, companies that make it easier to do the right things are better able to reduce costs and risks, drive faster change, better serve customers and partners, and create healthier workplaces. This will be amplified in a human-led, AI-powered era.
The goal is simple: A new colleague, agent, or client should be able to ask, “How come it’s so easy to get things done here?”
Where do you start?
