I’m thrilled to sit down with Simon Glairy, a leading expert in insurance and Insurtech, renowned for his deep insights into risk management and AI-driven risk assessment. With the UK insurance industry undergoing a significant digital transformation, as highlighted in a recent survey by Covernet, Simon is the perfect person to help us unpack the motivations, challenges, and future implications of this shift. In our conversation, we explore what’s driving insurers to prioritize digital platforms, the satisfaction gaps with current technology, the risks of underperforming systems, and the balance between cost savings and strategic goals. Let’s dive into this fascinating discussion.
What’s fueling the push for digital transformation among UK insurers, especially with many citing competitive advantage as their top reason?
I think the drive for digital transformation in the UK insurance sector largely comes down to the need to stay relevant in a fast-evolving market. With 39% of insurers pointing to competitive advantage, it’s clear they’re feeling the heat from both traditional competitors and agile Insurtech startups that leverage technology to offer faster, more personalized services. Beyond that, customer expectations are shifting—people now demand seamless, digital-first experiences, much like they get from other industries. This pressure to keep up, combined with the potential to streamline operations and cut costs, makes digital transformation not just a choice, but a necessity for survival.
How significant a role do customer expectations play in this digital shift, considering that a notable portion of insurers are responding to customer demand?
Customer expectations are absolutely a major factor. About 21% of insurers in the survey mentioned customer demand as a key motivator, and I’d argue that even those who didn’t explicitly cite it are still influenced by it. Today’s policyholders expect instant quotes, easy claims processes, and personalized offerings, all accessible through a mobile app or website. If insurers can’t meet these demands, they risk losing customers to competitors who can. It’s not just about keeping up; it’s about building loyalty and trust through better experiences, which ultimately ties back to business growth.
Why do you think there’s such a gap in satisfaction with current technology, with only a little over half of insurers feeling their systems meet functional needs?
The gap in satisfaction—where only 61% of insurers feel their tech is up to par—often stems from a mismatch between what systems promise and what they deliver in real-world scenarios. Many insurers adopt technology without a thorough understanding of their specific operational needs or without proper integration into existing workflows. Legacy systems also play a role; they’re often clunky and hard to upgrade, leading to patched-together solutions that don’t fully address modern challenges like real-time data processing or scalability. This disconnect leaves a lot of firms frustrated with tools that fall short of expectations.
What are some of the biggest risks for insurers who stick with underperforming technology, especially when a significant number report neutral or poor satisfaction?
Sticking with underperforming tech is a risky move. For starters, it can erode a company’s ability to compete—when 39% of insurers are already dissatisfied, those who don’t act risk falling behind rivals who invest in better systems. Operationally, outdated or inefficient platforms can lead to slower response times, errors in underwriting, or delays in claims processing, all of which damage customer trust. Over time, this can translate into lost business and reputational harm. Plus, there’s the hidden cost of inefficiency—wasting time and resources on workarounds instead of innovation.
Given that nearly 90% of insurers see digital platform adoption as critical, what makes these platforms so essential to their business right now?
Digital platforms are essential because they’re the backbone of modern insurance operations. They enable everything from accurate pricing and underwriting to efficient claims handling and customer engagement. With 88% of insurers recognizing their importance, it’s clear these tools are seen as the key to unlocking speed, precision, and scalability. They also allow insurers to harness data analytics for better decision-making and to offer personalized products, which is critical in meeting today’s customer expectations. In short, digital platforms aren’t just a trend—they’re the foundation for staying competitive in a data-driven world.
Do you think focusing on cost savings as a driver for digital transformation could lead to compromises in quality or long-term planning for some insurers?
Absolutely, there’s a risk there. While 15% of insurers cite cost savings as a motivator, prioritizing short-term financial gains can backfire if it means skimping on robust, future-proof systems. Cheaper solutions might save money upfront but often lack the scalability or functionality needed for long-term growth. I’ve seen cases where firms opt for budget platforms only to face higher costs down the line due to system failures or the need for expensive upgrades. Insurers need to balance cost considerations with a clear-eyed view of what their business will need five or ten years from now.
There’s talk of a disconnect between digital aspirations and operational reality in the industry. Can you elaborate on what this means and how widespread you think this issue is?
This disconnect refers to the gap between what insurers hope to achieve with digital transformation and what their day-to-day operations can actually support. Many firms set ambitious goals—like fully automated underwriting or seamless customer portals—but their existing processes, staff training, or legacy systems aren’t ready to handle these changes. I’d say this issue is quite widespread; it often happens when companies rush into adopting new tech without investing in the groundwork, like thorough needs assessments or change management. The result is a shiny new platform that doesn’t integrate well with the business, leaving teams frustrated.
How can insurers better align their digital transformation goals with the practical realities of their operations?
Alignment starts with a clear strategy. Insurers need to invest time in understanding their unique needs before selecting a platform—things like discovery phases and proofs-of-concept are crucial. They should also prioritize change readiness, ensuring staff are trained and processes are updated to support new tools. It’s not just about the tech; it’s about building a culture that embraces change. Dedicated teams or roles focused on transformation can help, rather than treating it as a side project. When goals and operations are in sync, digital tools can truly enhance performance rather than just replicate old inefficiencies.
What’s your forecast for the future of digital transformation in the UK insurance industry over the next few years?
I’m optimistic but cautious about the future. Over the next few years, I expect digital transformation to accelerate as more insurers recognize the need for modern platforms to stay competitive. We’ll likely see greater adoption of AI and data analytics for personalized offerings and risk assessment, alongside improved customer-facing tools. However, the challenge will be overcoming the current satisfaction gaps and operational disconnects. Those who invest in proper planning and long-term solutions will thrive, while others who rush or cut corners may struggle. It’s going to be a defining period for the industry, separating the innovators from the laggards.
