Insomnia is a symptom. It makes people unable to sleep, making them less productive. This increases the cure requirement by 3%. This symptom does increase severity, but has no effect on the infectivity of your disease.
In the Necroa Virus DLC, if the player evolves this symptom, the governments will distribute sleeping pills, to reduce the severity and infection of the virus.
This symptom only raises severity a small amount, so it should be safe to evolve even at higher difficulties. With the symptom Anaemia, it can make the Walking Dead symptom combo, which unlocks the Brainzzzz achievement.