The UK insurance market is no stranger to navigating hardship. With over three centuries of risk expertise, British insurers have often found themselves at the forefront of innovation in order to respond to customer needs and dynamic markets. For example, Lloyd’s underwrote marine insurance for ships transporting grains from Ukraine during active war in the region.
In addition to geopolitical challenges, global insurers are navigating increasing severe weather events and catastrophes, high inflation for longer, changing technology environments powered more and more by artificial intelligence (AI) and global economic shifts. To keep up with these additional threats, insurance premium costs are increasing, and insurers are developing more stringent coverage terms and conditions for lines that could be impacted.
But as the largest insurance market in Europe, the UK, especially the London Market, remains dominant — particularly when it comes to specialty, capturing over 40% of global market share for marine, aviation and energy. Evolving risks are offering carriers opportunities to create value for customers and differentiate themselves in the market. But it’s not always clear how to find those opportunities.
Based on conversations we’re having with UK insurers, here are five of the top questions on the minds of property and casualty insurers in 2025.
- How can I strengthen my underwriting and risk management capabilities?
Strong underwriting profitability continues to be critical for insurers to service their customers effectively as well as to retain the capital needed for smooth operations. Technologies such as GenAI and advanced analytics can provide actionable insights and enable precise risk evaluations more efficiently than traditional methods.
These tools can help enhance underwriting accuracy and speed, which are critical for improved underwriter capacity, better pricing and smarter risk selection. This can lead to substantial improvements in profitability as well as customer and broker satisfaction. For example, Ki Insurance has adopted an algorithmic approach to underwriting that pairs underwriters with data science experts for portfolio management to drive scalable growth. - With fraud on the rise, how can I detect and mitigate fraud within my claims organisation?
The Association of British Insurers found that total instances of insurance fraud rose 4% between 2022 and 2023, with exaggerated loss claims as the most frequent type of fraud. Fraud is on the rise across motor and property, in particular, rising 8% and 16% respectively. This is perhaps why UK insurers spend at least £200 million annuallyon fraud detection.
In an effort to combat this increase in criminal activity, insurers are working with the government to reduce fraud by 10% by the end of this year as part of the Insurance Sector Fraud Charter. Insurers can do their part by leveraging data analytics, among other tools, to identify and flag suspicious activity across areas like claims and policy applications where fraud is most likely.
- How can I leverage technology like GenAI to streamline my claims process as well as loss prevention services?
Just like fraud, claims costs are on the rise. In 2024, UK motor claims reached a record-breaking £11.7 billionwhile property claim payouts cost UK insurers £4.1 billion. To combat these soaring costs, insurers are seeking to streamline their claims operations and optimise their processes. Insurers are exploring avenues such as Internet of Things data, automation, the insurance partner ecosystem and digital twins to improve their claims workflows.
One trend that stands out as a way to improve the claims process is generative AI (GenAI). While humans should always be involved, especially for more high-value or complex decisions, finding effective ways to integrate GenAI can lead to cost and efficiency savings. Zurich, for instance, accelerated its catastrophe claims process and saved $1.4 million by leveraging GenAI.
- How can I shore up my institution to deal with increasing catastrophic weather incidents?
As Zurich saw, catastrophic weather is costing policyholders, insurers and reinsurers dearly. But waiting until a claim needs to be paid out to deal with catastrophes is leaving too much to chance for both insurers and the communities they safeguard. Advanced analytics and catastrophe modeling can help insurance companies and the customers they serve across the entire value chain. Risk solutions like Moody’s can help insurers gain an accurate view of their risk management and model what losses might look like for a variety of scenarios.
For the UK, this could help with severe weather incidents such as recent flooding in the Midlands, which left dozens stranded and one dead, especially as climate change may mean UK winters become even rainier in the future. Leveraging information like hazard data can help insurers be certain that policyholders have adequate coverage and that they are prepared to cover costs in the event of a disaster.
- How can I optimise my product portfolio to ensure I’m meeting consumer and market demands?
With new considerations like the FCA’s focus on ensuring products are providing consumers with a high value proposition and the incorporation of technology like GenAI and advanced analytics, insurers are looking to improve their product portfolios to meet emerging consumer and market needs.
Whether it’s additional cyber products, expanded motor coverage or parametric products, UK insurers have an opportunity to reshape the offerings they are providing policyholders. Monitoring emerging risks like climate change, cyber threats and autonomous vehicles can provide insurers with avenues to profitable growth and consumer satisfaction.
The global insurance market is dealing with numerous challenges, and the UK is no exception. For insurers in this region to remain at the forefront of the global markets, it is paramount for carriers to simplify the ease of doing business and reduce the cost required to connect risk with capital.
Prioritising technology investments that can streamline processes, reduce costs and meet consumer demands will lead insurers to continued success in an already profitable market. To learn more about how to modernise workflows across the value chain, read our whitepaper The Insurer’s Generative AI Handbook.
