There has been a subtle yet powerful shift across the UK insurance sector. While much of the conversation continues around regulatory changes, claims ratios, and financial performance, true strategic innovation is happening quietly, led by digital product teams.
Executive Summary
In 2025, UK insurers face increasing pressure: aging tech stacks, demands for real-time personalisation, and rising competition from Insurtech disruptors. To compete, firms are reimagining their structure. Long-lived, cross-functional digital product teams , combining product, engineering, data, UX, and compliance , are replacing project-based IT silos. These teams are not only building modern platforms, they are defining customer experiences, accelerating innovation and shaping business models fit for the digital age.
Why This Shift Is Now Critical
Three forces are reshaping the insurance landscape:
- First, legacy digital infrastructure is unsustainable. Allianz UK has announced the elimination of 650 roles as part of a dramatic restructuring—despite reporting a 52% rise in operating profit (£368m). The insurer plans to reinvest heavily in digital, aiming to simplify operations, strengthen pricing capability, and deliver future-ready platforms. (Insurance Times).
- Second, consumers expect instant, mobile, first experiences. A 2025 review of Insurtech trends underscores AI, driven quoting, claims automation, and embedded policies as the new normal—pushing incumbents to modernise fast or risk losing relevance. (Fintech Times).
- Third, generative AI and automation are upending traditional operations—from underwriting to claims. Deloitte analysts warn legacy systems and poor data integration now pose key barriers to transformation. (Deloitte/WSJ)
The Four Pillars of Modern Insurance Commerce
Across the UK and Europe, insurance leaders are building digital maturity around four strategic pillars:
AI-powered Claims and Underwriting
Tools like Tractable’s computer vision AI are enabling near real-time damage assessment and claims decisioning, reducing operational burdens and accelerating payouts.
Personalised Pricing
Usage-based and telematics policies, powered by granular customer data, are transforming risk models. But with personalisation comes regulatory scrutiny – especially around fairness and transparency. (Wolters Kluwer).
Embedded Interfaces & API Platforms
Forward-thinking insurers are delivering insurance at point, of, sale—from bookings to retail—via API, first platforms, favoured by product-led teams.
Intelligent Self, Service
Claim portals and AI-powered chatbots now resolve routine queries autonomously, improving efficiency and freeing human teams for higher value interactions (Davies Group).
How This Affects Policyholders
The impact of these changes is tangible at every touchpoint:
- Unified experiences. Whether quoting, purchasing or navigating a claim, customers no longer tolerate disjointed journeys across digital and offline channels.
- Real-time personalisation. AI-powered assistants now recommend policy changes or upgrades—based on usage and lifecycle data—with far greater contextual relevance.
- Claims in minutes. Instead of waiting days or weeks, simple claims are closed in hours using image-based assessments and automated decision-making.
- Embedded loyalty. Policyholders receive proactive prompts, like weather warnings or safe driving bundles—delivered contextually through the product lifecycle.
These experiences are not designed by matrixed IT functions. They are governed, iterated, and refined by dedicated product teams with real-time feedback loops.
The Commercial Imperative
The business case for investing in modern, product-led teams is growing stronger by the month. According to a 2025 analysis by BCG, insurers embracing digital product strategies have the potential to cut claims costs by up to 20%, accelerate resolution times by 50%, and boost customer satisfaction through improved Net Promoter Scores (BCG).
This isn’t theory. It’s already happening. Allianz UK, for example, is investing £200 million annually in digital transformation as part of a wider strategy to streamline operations and reduce complexity across its UK business units (Insurtech Digital).
At a national level, the UK government’s 2025 AI Growth Plan signals strong intent to accelerate innovation in insurance. With a focus on supporting emerging Insurtech partnerships, the plan positions AI as a core lever for transformation across underwriting, claims, and customer experience (InsurtechInsights).
Together, these forces point to one conclusion: insurers that invest in modern product talent and evolve their operating models will not only improve agility and reduce cost but also strengthen loyalty in a market where expectations have never been higher.
The Talent Behind the Transformation
Digital transformation in insurance isn’t just about platforms or AI models. It’s about the people who bring those systems to life, and the operating models that support them.
Today’s product leads are expected to combine entrepreneurial vision with regulatory fluency. They must navigate compliance constraints while still delivering fast, iterative value to users. Engineers, too, are evolving. Full-stack teams are building modular front ends that connect seamlessly – often via APIs – to legacy systems still critical to core operations.
Behind the scenes, data scientists and machine learning engineers are operationalising underwriting models, flagging anomalies, and automating fraud detection at scale. At the same time, UX designers, compliance experts and operational analysts are working side by side to balance customer experience with governance and business performance.
This shift isn’t just structural, it’s cultural. Across the market, insurers are moving away from short-term project-based delivery toward long-lived, multidisciplinary squads. These product teams are now benchmarked against digital-native norms, held accountable for outcomes like retention, claims resolution rates, conversion, and FTE cost efficiency.
As Deloitte succinctly puts it: without the right digital talent in place, even the most ambitious tech strategy risks becoming an exercise in financial waste, not performance (Deloitte via WSJ).
What’s Next: 2026–2028
Looking ahead, the next wave of insurance innovation will be driven by teams that move fast, measure relentlessly, and learn in real time.
By 2026, we expect to see:
- Generative AI powering quote generation and product upgrades, based on real-time user intent.
- Embedded insurance flows seamlessly integrated into retail, wellness, or mobility ecosystems.
- Behaviour-linked dashboards using smart home or wearable data to shape pricing in real time.
- Sustainability scoring woven directly into policy journeys, helping consumers understand and reduce their carbon footprint as part of their cover.
What’s notable is not just the tech – but where it’s being built. These aren’t IT-led rollouts. They’re the output of agile product squads, iterating quickly based on user feedback, commercial performance, and a changing regulatory landscape.
Final Thoughts
At Simply Commerce, we work with insurers, insurtechs and platform partners to build the teams that power real transformation. Not just developers or product owners, but end-to-end squads who can iterate fast, navigate regulation, and deliver impact sustainably.
Insurance innovation doesn’t come from buying off-the-shelf tools. It comes from investing in people – people who can ship meaningful products, at pace, with purpose.
So, the question is: does your team have the product mindset, AI fluency, and commercial agility to lead from the front?
