> I never worked in a large company

I don't want to be rude, but it sounds like you don't know what you're talking about.

It often goes far beyond "insurance." A lot of this stuff is performative. Some people simply aren't good at executing, and many managers are focused on appearances and increasing the size of their kingdoms. Most can't allow themselves to be fine setting a roadmap and having it execute smoothly. There are all sorts of other perverse incentives and absurd behaviors I could go into, but the notion that it's all completely rational is silly.