UK Insurers Eye £500m AI-Driven Savings by 2030
UK home and motor insurers could unlock up to £500m in annual productivity savings by 2030, according to new analysis from Deloitte. The modelling indicates that 55% of these potential savings lie within core operations, claims management, IT and support functions. Central to the projection is the role of artificial intelligence in transforming claims processes.
AI-Driven Claims Transformation
Analysis shows that AI-enabled claims transformation can materially improve performance, reducing processing times by up to 20%. Dotun Aboaba, director at Deloitte, explained that this leads to “a faster, more efficient claims experience that allows home and motor claims professionals to focus more of their time on complex customer needs and value-adding activities.”
Despite these efficiency gains, insurers operate in a softer market environment. Average combined home and motor premiums fell 4.3% year-on-year from £916 in Q1 2025 to £877 in Q1 2026, ABI data shows. Concurrently, claims costs continue to rise, with Deloitte expecting raised materials inflation to exert further pressure.
Market Trends and Long-Term Projections
Deloitte projects net earned premiums will grow at a compound annual rate of 2.5%, increasing from £22.8bn to £26.4bn by 2030. Insurers that capture productivity and efficiency savings could see their administrative expense ratio decline from 10.3% to 8.7% over the same period.
, partner at Deloitte, described the UK insurance market as being at an inflection point. He noted that insurers face the challenge of a softer market while dealing with raised claims inflation, necessitating operational changes for long-term growth and profitability. Allen emphasized that achieving these savings requires more than incremental measures—it demands work redesign, embedding best practices and deploying AI, automation and restructured workflows to enhance delivery economics without compromising outcomes for customers, brokers or businesses.
