Insurers often attribute operational inefficiency to legacy systems, complex processes or regulatory overhead. In reality, much of that inefficiency stems from how everyday work is performed and how fragmented workplaces slow it down.
How employees access systems, information and support has evolved unevenly over time. They have adapted tools and processes locally and introduced workarounds to keep work moving. Individually, these changes may seem practical. Collectively, they introduce friction that undermines productivity, consistency and scale.
As insurers look to work more efficiently and control operating costs, this hidden friction is becoming harder to ignore. To address it, they need to understand where fragmentation occurs and how it affects their daily operations.
The subtle impact of fragmentation
In most cases, the cost of fragmentation does not come from major outages or visible breakdowns. Instead, it appears in everyday tasks. Employees may need to switch between tools to complete a single activity, search across disconnected sources for information or rely on informal knowledge sharing to bridge gaps between systems.
These small inefficiencies increase the workload in small ways that add up to major challenges. They also introduce inconsistency in how processes are carried out across teams and regions. Over time, this affects underwriting turnaround times, claims-handling efficiency and service responsiveness, even when core systems are functioning as intended.
Because these issues are distributed across workflows, they are often difficult to trace back to a single cause. They persist, quietly, reducing productivity and increasing operational friction.
ALSO READ -> The intelligent core: AI transforms smart buildings into engines for EX
Growth and scale amplify workplace complexity
Workplace fragmentation becomes more pronounced as insurers grow. Expansion into new markets, mergers and acquisitions, and changing regulatory requirements all contribute to variation in tools, access models and ways of working. Different business units may operate at different levels of digital maturity, supported by different workplace technologies and processes.
Without a coordinated workplace approach, this makes it difficult to scale shared services or apply governance consistently. Support teams have to manage multiple environments, while employees moving between roles or regions face steep learning curves. The operating model becomes harder to manage, secure and optimize.
At scale, fragmentation also complicates compliance and risk management. Inconsistent access controls, duplicated information sources and uneven support processes make it more challenging to maintain transparency and auditability across the organization.
The strain on support teams
Support teams are often among the first to feel the effects of fragmentation. Many employee requests are not driven by system failures but by confusion around access, inconsistent tools or unclear processes.
Issues such as “I can’t find the right information,” “I don’t know which system to use,” or “This works differently in another region” result in time-consuming tickets without addressing the underlying technical shortcomings.
This increases support teams’ workload while limiting their ability to focus on preventive improvement. Instead of resolving root causes, they’re drawn into managing the symptoms of fragmented environments. Over time, this reactive cycle becomes costly and difficult to break.
Fragmentation affects service quality and efficiency
The impact extends beyond internal operations. When employees lack consistent access to information or collaboration tools, they can’t always provide timely, accurate service to customers and brokers. Delays in internal handoffs or uncertainty around process ownership can affect response times and service consistency.
In competitive insurance markets, these delays matter. Customers increasingly expect fast, informed interactions across channels. When internal workplaces don’t support this expectation, service quality suffers even when frontline systems seem to be robust.
ALSO READ -> Future of Work 2030: Making AI work in the workplace
From incremental fixes to coordinated workplace design
Fragmentation is often addressed through incremental fixes: Adding new tools, resolving local pain points or introducing workarounds to bridge gaps. But while these measures may provide short-term relief, they rarely reduce complexity over time — and frequently make it worse.
A more effective approach requires coordinated workplace design. This involves aligning tools, access models and support processes across the organization while still allowing flexibility to meet local regulatory and operational requirements. Standardization, when applied in a deliberate and considered manner, reduces duplication and simplifies governance without forcing uniformity where it does not make sense.
Importantly, addressing fragmentation is not solely a technology exercise. It also requires clarity on how work should flow, how information should be accessed and how support should be delivered across regions.
Act with urgency to simplify your operations
As insurers continue to modernize their core systems, rearchitect applications and explore new operating models, the cost of fragmentation becomes more visible. Even the best technology investments fall short if the workplace makes it difficult for employees to work efficiently and consistently.
To simplify your operations, strengthen governance and support scale, recognize fragmentation as a structural issue rather than a collection of local problems. If you fail to do so, you’ll find that complexity increases faster than efficiency gains.
WHAT TO DO NEXT
Read NTT DATA’s ebook, Shaping the future of work in insurance, to examine how insurers are addressing workplace fragmentation and what a more integrated approach looks like in practice.