Modern Insurance Magazine


Simplify the complex in the insurance market


Simplify the complex in the insurance market

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Simplify the complex in the insurance market. This is indeed an ideal scenario. Leonardo da Vinci summed it up beautifully with his observation, ‘Simplicity is the ultimate sophistication’. The reality remains that in too many cases insurance distributers are afraid to make big changes.

The internal complexities within the market have three main causes:

  1. Strategic complexity
  2. Complex lines of responsibility
  3. The wrong technology solutions

Delivering innovation and sustainable growth with these restrictions is nigh on impossible.


The oft used phrase ‘If you don’t know where you are going, how are you going to get there?’ is certainly true in the insurance market. The starting place for any organisation is the definition of a clear strategy.

Insurers talk about simplifying products – and then add more and more complexities to their existing portfolio. They talk about creating loyalty, but then reward volume rather than persistency. They talk about ‘customer centricity’ but don’t understand their customers. Worst of all they have spent decades pointing to the ‘insurance gap’ but then continued to use the same tired approach and do not embrace new ideas. There is no chance of engaging a new audience by doing things the same way. In short, there are still too many examples of  the ‘we have always done it this way’ attitude.

Consistency is possibly a ‘big ask’ given the constantly shifting personnel at board level, but without it a company will really lack direction and focus. Strategy is simply about guiding large numbers of people to do the things they need to do. Basically, many are falling into one or more of the following traps:

  • Too many changes in strategy (shifting goalposts)
  • Too many strategies (initiative overload)
  • Unclear strategy (confused priorities)
  • An overly complex planning process


Activity has to create value and work towards the goal. Anything that doesn’t create value, or creates it in a convoluted, costly or inefficient way, needs to be stopped.


Put simply, the needs of the customer should dictate the hierarchy of any insurance business, not the product line or the distribution channel. If we are to see Insurers meeting the holistic product and purchase convenience requirements of their customers, there has to be more ‘joined up’ thinking.

Currently there is little overlap between general insurance and ‘protection’ product responsibilities – but customers need both. Likewise responsibilities are often allocated by distribution channel. This makes communication complicated as customers will use multiple channels. Sometimes they will buy online, sometimes via the ‘phone and often using an Intermediary.

As choice of product and methods of purchase have increased, so have the complexity within Organisational design and it does not seem to be benefitting either the customer or the company. A horizontal rather than vertical organisational design would ensuring the sharing of ‘best practice’, deliver benefits of economies of scale with technology and deliver more product sales per customer.

Having the right people in place to drive this vision is of course essential. ACORD and Alchemy Crew have recently released a study on Primary Drivers of Success Among European Insurers. The report identifies the need for a ‘culture of core competency’. Success of any company is so dependant on the passion and ability of the staff.


Technology is undoubtedly a game changer. But only if the right people and strategy are in place. Digital technology heralds a new era, with the ability to deliver mass individualisation, but only when the leadership is ready to make bold decisions. Data insight plays a big part in offering personal solutions. According to Accenture, ‘Consumers are embracing the data-for-personalized-pricing trend’. Reporting on their Global Insurance Consumer Study, the article  Consumers are willing to share data for behaviour based insurance premiums also noted a fall in trust around the use of data. In addition, customers expect the online and offline retail experience to be seamless and personalised to meet their individual needs.

Unfortunately, the insurance market does not have the technology in place to meet these expectations consistently.  Many are still constrained by legacy systems, despite the accelerated need for digital options driven by COVID-19. Additionally they are bound to complex product and process design.

With the leadership, the will and the right technologies in place, we can simplify the complex. Simple is not easy – but nothing worthwhile ever is!

Content has been prepared exclusively by Total Systems plc, a specialist provider of insurance systems developed for the digital insurance age.