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We've seen AI and automation revolutionize adjacent sectors, yet insurers still grapple with tedious manual processes and outdated legacy systems. Operational inertia is a silent force holding many organizations hostage, leaving teams burdened by inefficiencies and policyholders frustrated with sluggish processes.
Charlie Wendland, Chief Claims Officer at Branch, has spent over two decades navigating these challenges. At companies like Progressive, Travelers, and now Branch, he has made it his mission to eliminate inefficiencies, modernize claims operations, and build a culture of continuous improvement.
We talked to Charlie at length about operational inertia and how insurance leaders can break through it to turn hesitation into action. Keep reading to discover how you can apply his five proven strategies to your organization.
Why Insurance Companies Often Struggle with Operational Inertia
Like many highly regulated industries, insurance maintains comfort within the status quo. Legacy processes and systems are considered safe and familiar, and multi-layered decision-making often creates roadblocks to change, even when promising solutions arise.
Some of the key barriers to change Charlie has seen during his years in the industry include:
Looming Regulations
Insurance companies operate within a framework of stringent legal and financial regulations designed to protect consumers and maintain market stability. While essential, Charlie has seen firsthand how these regulations can slow down the implementation of new technologies and processes. Compliance requirements often necessitate extensive approval workflows, making even minor operational changes cumbersome.
Multiple Decision-Makers
Speaking from experience, Charlie mentions that decision-making within organizations usually involves multiple stakeholders, including executives, IT departments, compliance officers, and frontline claims professionals. This multi-layered approval structure often leads to prolonged deliberations that hinder the ability to take swift action.
"This is why many insurance professionals resort to workarounds in their day-to-day tasks," explains Charlie. "When you know approval processes will take months on end, you're inclined to do anything to get your job done more efficiently today."
Technical Debt
According to Charlie, the insurance industry's technical debt isn't driven by the overuse of expedited solutions but rather a failure to continually update and invest in innovation. Over 74% of insurers still rely on legacy systems that are outdated and inflexible, a choice that can have tangible downstream impacts, including:
- Wasted and siloed data
- Reduced efficiency across teams
- Inability to meet evolving customer expectations
However, Charlie explains that because insurers are naturally averse to risk, they often struggle to see the ROI in addressing this looming technical debt. As such, they remain tethered to legacy systems that act as a perpetual barrier to innovation.
Data and Integration Hurdles
While many modern solutions go to great lengths to simplify the onboarding process, not every tool is plug-and-play. During his time in previous roles, Charlie saw firsthand how existing data silos, lack of standardization across legacy platforms, and technological skill gaps can impede the implementation of new solutions.
"After relying on these bloated legacy systems for years, introducing new solutions can sometimes be a bit of a hurdle," explains Charlie. "There are many factors that the change is dependent on from a data and integrations perspective, and ensuring you have the resources for a smooth onboarding is crucial."
While these blockers seem intimidating at first glance, they're far from impassable. Under Charlie's leadership, Branch developed a system designed to bypass these hurdles, innovating at scale and positioning itself for continued growth.
"If you wait for the perfect time to fix inefficiencies, you'll be waiting forever. The key is to find the right opportunities, start small, and build momentum because doing nothing is the real risk."
Charlie's 5 Proven Strategies for Overcoming Operational Inertia
So, how can your organization build on Branch's success and transform hesitation into action? From incremental modernization to employee-driven innovation, these are Charlie's most impactful strategies:
1. Modernizing Legacy Systems in Phases
While a complete system overhaul may seem ideal, it is often too expensive and time-consuming for most insurers to sign off on. While Branch didn't face this issue, 75% of organizations in the insurance industry rely on legacy systems that need to be modernized. To mitigate this, Charlie recommends a phased approach, using APIs and cloud-based integrations to modernize incrementally without disrupting operations.
Charlie recommends using APIs because they enable legacy systems to "communicate" with new solutions without requiring a complete rebuild. Additionally, cloud-based solutions reduce reliance on on-premise infrastructure, allowing for greater scalability and security.
When Branch, for instance, implemented Kyber's AI-powered document generation solution, the process took less than a week via the tool's safe and secure API. Better yet, Charlie's claims teams reduced time spent drafting and reviewing notices by 65% since the implementation.
2. Leveraging Managed Services
One of the biggest barriers to modernization in insurance is the burden of maintaining and upgrading complex systems in-house. IT bottlenecks, long approval cycles, and resource constraints often delay much-needed improvements. Charlie recommends taking a 'serviceful' approach, i.e., using managed services instead of building and maintaining solutions internally.
Managed services run on cloud-native architectures, using APIs to integrate seamlessly into existing workflows. By offloading infrastructure management, automation, and scaling to trusted providers, claims teams can deploy faster, more efficient processes without relying on internal IT resources.
Instead of reinventing the wheel, insurers can adopt proven, serviceful solutions that enhance claims processing, reduce manual workloads, and improve policyholder experiences, all without disrupting day-to-day operations.
3. Breaking Down Silos to Drive Cross-Functional Alignment
As Charlie mentioned, many organizational inefficiencies stem from poor communication between departments. Underwriting, claims, IT, and compliance often work in isolation, leading to disconnected priorities and slow decision-making.
To overcome this challenge, Charlie encourages structured collaboration between underwriting, claims, IT, and operations teams at Branch. With these teams aligned, he ensures all modernization efforts address real business challenges while speeding up decision-making by getting buy-in across departments early.
"If your underwriting team is working on one goal and your claims team on another, your technology investments won’t be as effective. The best results come when everyone is aligned from the start."
4. Leaning into Change Management to Drive Cultural Shifts
Operational inertia is as much a cultural issue as a technological one. Charlie has seen how employees accustomed to longstanding processes resist change, often out of fear of job displacement, workflow disruptions, or skepticism about new technology.
To combat this issue, Charlie recommends actively involving employees in the decision-making process, ensuring they see these solutions as a way to enhance their work rather than a means to replace them.
Start by creating a transparent culture where employees feel safe suggesting improvements. The last thing you want is for employees to fear retaliation or perceived incompetence, which can cause many of them to suffer in silence.
Next, provide additional training and support to ease the transition into your new workflows. While this may seem like a heavy upfront lift, the downstream efficiency gains will more than offset this initial burden.
"If you don't involve employees in change, they'll work around it instead of with it. The goal is to show them that automation removes the pain points, not their role."
5. Customer-Centric Decision Making
At the core of every innovation decision, there should be one guiding principle: How does this impact our customers? In Charlie's experience, insurers occasionally focus solely on internal efficiencies without considering how proposed changes affect policyholders. If, for instance, operational decisions prioritize cost-cutting over customer satisfaction, insurers risk higher churn, lower trust, and weaker long-term growth.
At Branch, Charlie promotes customer-centric decision-making by engaging claims professionals and frontline teams to identify common friction points. He also leverages AI-powered solutions to uncover any recurring customer complaints and streamline automation support.
"We want to be our customer's best friend on their worst day. That means automating what slows adjusters down while providing the human support customers need."
Taking the First Step Toward Change
Overcoming operational inertia requires a mix of steady implementation, cultural change, and leadership commitment.
Charlie's approach at Branch was not about overnight overhauls. Instead, his team identified key inefficiencies, tested AI-powered solutions where they made the most impact, and built a culture that embraced operational improvements.
The result? Faster claims processing, reduced administrative burden, and a better experience for both employees and policyholders, all without breaking the business.
"If we just have executives making decisions in a vacuum, we're in trouble. We need to hear from the people doing the work, find out what's slowing them down, and solve it before it becomes ingrained."
Read more to learn how Branch reduced claim notice drafting time by 65% with Kyber, or book a demo today to see how you can automate your claims process!
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