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Key Takeaways
- Complexity is a friction tax that accumulates over time, making insurers slower, costlier, and harder to change.
- Simplification requires subtraction by design, not just cost cuts, and must be measured and owned by leaders.
- Reinvention with AI works only after legacy complexity is removed; otherwise, you automate the mess.
Have you ever asked yourself: “Why is it so hard to get things done around here?” In my twelve years as a senior claims consultant at NN Group, I saw this question echo through every layer of insurance operations. The answer, more often than not, is complexity — a silent tax on every process, decision, and customer interaction.
Let me be direct: complexity is rarely the result of one bad decision. It accumulates. Acquisitions are partially integrated, regulations evolve, legacy systems pile up. Long-tail books, local variations, and multiple distribution models add layers. In life and pensions, decades of product history create a back book that feels impossible to untangle.
Sutton and Rao call this the “friction tax”. Sensible additions accumulate until the organisation becomes harder to navigate, harder to change, and harder to perform. I’ve seen this go wrong too many times: insurers spending millions on band-aid solutions instead of addressing the root cause.
But here’s what most people miss: complexity is not inevitable. It can be reduced, managed, and even removed. The question is not whether you can simplify, but whether you have the reinvention mindset to do it systematically.
Why Simplification Matters More Than Ever
In my experience across Europe, simplification is not just about cost. It lowers cost, strengthens risk and controls, accelerates change, and improves service. Costs fall sustainably when organisations challenge fragmentation, duplication, manual work, exception handling, and unnecessary management layers.
This goes beyond another annual cost “haircut”. It asks harder portfolio questions: which products, markets, processes, systems, and meetings still earn their right to exist? What should we stop?
Simpler processes and cleaner data also improve decision quality, which is vital in underwriting, actuary, claims, and reserving. Simplifying the decision environment gives experts more space to exercise judgement well.
For customers and intermediaries, simplification improves experience, removing repeated information requests and broken hand-offs, speeding up quoting, onboarding, claims, and renewals.
To put it plainly: complexity is a choice. And so is simplification.
The Psychology of Addition Bias
Human behaviour works against simplification. 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 particularly true when leaders work within their function, business, or country, delivering well but creating duplication.
In my experience, this addition bias is the biggest obstacle to simplification. It’s not that people are lazy or incompetent; it’s that the system rewards addition. Removing something feels risky, even when it’s the right thing to do.
That’s why reinvention matters. It’s not just about doing things better; it’s about doing fewer things, and doing them well.
Lead as a Trustee of People’s Time
Ask what burdens can be removed from underwriters, claims teams, actuaries, brokers, advisers, and operations colleagues. What consumes energy without improving customer, risk, or business outcomes?
Make complexity reduction measurable: product variants, systems, forums, approvals, exceptions, and hand-offs removed. Give leaders explicit ownership for reducing them.
At one large Asian insurer, product teams adopting modern engineering and agile delivery kept hitting organisational friction. Leaders created a cross-functional “broom squad” across IT, business, finance, risk, HR, and procurement to remove blockers no single team could solve. Around 70% of the portfolio moved into a product-based model and change accelerated.
If I were filing this claim myself, I would ask: what is the one process that, if removed, would make the biggest difference? Then I would start there.
Reinvent Work to Be Simple, Not Just Simpler
Redesign value chains end to end. Start from the future value you want to create, then rethink the work, workforce, technology, and AI required to deliver it. Agentic AI in particular can be powerful to reinvent, automate, and augment work, but it should not automate legacy complexity.
At one global insurer, we simplified underwriting work and reduced risk criteria by almost half before introducing agentic AI. Processing time fell from three days to about 15 minutes, review coverage increased from around 20% of broker submissions to 100%, and revenue increased by around 50%.
The reality is straightforward: AI is not a silver bullet. If you automate a broken process, you just get a faster broken process.
Build an Ownership Mindset
Give people permission to retire legacy processes, remove redundant controls, fix root causes, and make the organisation easier to navigate. Recognise subtraction as a brave behaviour and worthwhile outcome to be recognised and rewarded.
Small changes like the words we use can help. Insurance is rife with “jargon monoxide”: acronyms and specialist language that make already complex organisations harder to navigate. Clearer language, better onboarding, and simpler ways of working help people understand the business, collaborate, and take an enterprise view.
As an example, at a major insurer we are developing their leaders, from the C-suite to value stream owners, to display enterprise mindset and individual accountability.
Make Every Change Subtract Complexity
Insurance is moving toward continual change, with product and value-stream models emerging across much of the sector. These models can reduce complexity by anchoring persistent multi-disciplinary teams and funding around persistent priorities and value, rather than disconnected projects.
Make removal part of the definition of done. If you launch a new process, retire an old one. If you introduce a new control, remove redundant ones. If you deploy AI, simplify the journey and decision logic first. Transition states are essential in larger transformation but need to carry commitment not to leave a half-finished outcome.
As an example, in our pensions admin operations for clients, as we apply waves of operational, technology, and AI change, we are also simplifying things to improve service and efficiency.
All leaders can drive simplification changes. For instance, they can run cross-functional friction audits, prioritise the biggest blockers, remove them visibly, and repeat. Treat simplification as a continual management discipline.
The Path Forward for European Insurers
Across insurance, organisations that make it easier to get the right things done will be better placed to reduce cost and risk, change faster, serve customers and partners better, and create healthier places to work. This is amplified in a human-led, AI-enabled era.
The ambition is simple: a new colleague, broker, or customer should be able to ask, “How come it’s so easy to get things done around here?”
Where will you start?
Twelve years inside the claims industry taught me one thing: most people leave money on the table simply because they don’t know the rules. EuroClaim exists to change that — practical guides, no jargon, no insurance PR.