Insurance sector among UK’s least innovative, research shows    

New research reveals that the UK’s finance and insurance sectors are among the least innovative industries, with just 37.3% of firms engaging in innovation.  

The findings, pulled from the UK innovation survey 2023 and published by lead generation experts Sopro, follow the Chancellor’s announcement of reforms to boost financial sector growth.   

Is a lack of innovation holding the insurance sector back? 

Innovation drives profitability, with government data showing that 60.5% of revenue for innovative businesses stems from new products, services, or processes.  

However, insurance firms face barriers such as outdated technologies and a risk-averse culture, which limit their ability to adopt change. 

Sopro’s analysis also identified broader barriers to innovation across industries, including market conditions meaning that many businesses see no need for innovation, and an over-reliance on past innovation. Other potential reasons include financial constraints, skills shortages, and the long-lasting impact of the COVID-19 pandemic.  

The financial and insurance sectors are particularly affected by legacy technologies, such as COBOL systems from the 1950s, which are costly to upgrade. Combined with the industry’s natural caution due to high stakes, this creates a significant innovation gap.   

Expert advice: innovate to survive 

Rob Harlow, chief innovation officer at Sopro, emphasised the importance of innovation for long-term success:   

“Innovation improves problem-solving, services, and overall performance. Businesses that embrace change can adapt to market trends and gain a competitive edge. Whether by introducing unique products or improving customer engagement, innovation drives growth.”   

Harlow advises firms to gather customer feedback, monitor trends, and revamp marketing strategies with multi-channel approaches and sophisticated lead generation techniques.   

As the government aims to drive economic growth through reforms, embracing innovation will be critical for insurance firms – just like all other UK businesses – to remain competitive and serve evolving customer needs.   

Image: Canva

Josie Geistfeld Josie is an editor for Claims Media. She welcomes feedback, comments, and opinion at josie.geistfeld@barkerbrooks.co.uk