Closing the Gap – The Fragmentation Problem in Property Insurance Claims

The way insurance claims are handled in the UK is changing. The industry has invested heavily in technology over the last decade, which means many of the foundations are already in place, but the challenge isn’t a lack of tools, but fragmentation. Disjointed systems, inconsistent data flows, and siloed workflows are preventing these tools from delivering the seamless, fair and transparent experience that policyholders expect, and regulators now require.

The introduction of Consumer Duty in 2023 marked an important shift in the UK regulatory framework. Building on the longstanding principle of treating customers fairly, it places greater emphasis on outcomes – requiring insurers to demonstrate that outcomes are fair, consistent, and appropriately governed.

That expectation is particularly relevant in property claims, which are among the most complex in the insurance market. Every home and building is different – whether it’s in construction, condition, age, or layout. The range of damage types is vast, from subsidence and escape of water, to storm damage and fire, each with its own scope, cost profile, and supply chain requirements.

The supply chains themselves are heavily fragmented, with local contractors, specialist trades, and materials varying significantly by region.

Managing that complexity in a way that is consistent, well-governed, and demonstrably fair places greater emphasis on how claims are managed, evidenced and overseen.

Structured estimating has long been part of UK property claims, but its role is expanding and deepening. Consumer Duty and growing operational pressures are accelerating broader, more consistent application across claim types and insurer segments, meaning it’s becoming the expected standard across the market, driven by the need for consistent pricing data, clearer audit trails, and stronger governance.

This evolution isn’t about eliminating cash settlements, which remain a deliberate and effective operational tool, particularly during surge events when claim volumes spike, or for straightforward or low-value claims where many customers value the speed and flexibility they offer. Rather, the goal is to ensure that cash settlements, alongside managed repairs, are underpinned by consistent, evidence-based estimating. Structured estimating strengthens cash settlements by providing a fair and transparent basis for the settlement values agreed.

The benefits of this greater clarity flow in several directions. Insurers gain better visibility of what claims should cost, grounded in validated data, rather than what individual contractors happen to quote. Policyholders have a more transparent basis for understanding, – and when necessary – challenging what they’ve been offered. Across the supply chain, a shared framework helps reduce disputes and speed up agreement. And compliance teams have a robust audit trail to demonstrate that Consumer Duty obligations are being met across claims of every type and value.

As expectations around consistency and evidencing increase, the underlying technology is becoming more widely adopted across the market as the baseline expectation for claims handling.

Artificial intelligence is one of the most significant forces reshaping how industries operate, and insurance claims are no exception. Its influence is already being felt across the way people work, make decisions and collaborate, and the full extent of that shift is still unfolding. While AI’s most visible impact is often in handling isolated tasks, its real value lies in connecting the entire claims journey.

In property claims, we are already seeing examples of AI’s positive impact. It is now possible to describe damage verbally and generate a preliminary estimate, saving time for experienced assessors while maintaining accuracy, with image-based assessment tools also a trend to watch. The potential of AI lies in its ability to help insurers make better use of data, reduce friction between disconnected processes, and create more intelligent workflows across the claims journey.

For policyholders, the picture is more nuanced, and claims teams can look to early consumer journeys for a clear indicator of market sentiment. Our latest research into the homebuying process shows that while 82% of homebuyers expect AI to play a role in insurance specifically, nearly half say fully automated decisions are ‘unacceptable’. Half of UK buyers would still rely on human professionals over AI when it comes to finding home insurance, and 48% would even pay an additional fee to have a human expert verify an AI-generated decision. If consumers demand this level of human verification at the point of purchase, that need for transparency and human oversight will only intensify during the high-stress environment of a property claim. Ultimately, 68% of these consumers want clear notification when AI is influencing a specific outcome.

Progress towards a more connected claims process – one where estimation, supply chain coordination, contractor activity, and policyholder communication operate within shared workflows, varies across the market. The challenge today is making sure different systems can communicate with one another effectively. While insurers may have significant technology in place, systems often operate in silos. The missing link is the ability for these systems to connect – currently, legacy architectures sit alongside more open platforms, with limited ability to exchange data in real time. The friction this creates – between estimating tools, claims management systems, supplier management platforms, and customer communication channels – compounds at every stage of the claim.

Closing that gap requires a shift from thinking about individual platforms to thinking about how the whole ecosystem connects. When all parties are working from the same information, decisions can be made faster, and policyholders have greater visibility of the process. It also gives insurers a more complete view of how claims are developing – helping them to spot patterns, from geographic areas where certain claim types are clustering to pressure points in the supply chain.

That visibility becomes particularly valuable during surge events, like major storms or flooding, when demand spikes suddenly and supply chain capacity is finite. Fragmentation is most painful precisely at these moments – duplicated site visits, inconsistent scoping, and delays in allocating contractors compound the pressure on both claims teams and policyholders. Connected workflows help insurers triage, prioritise and allocate resources more effectively during surge, which materially improves cycle times and customer experience.

The goal, as set out in Consumer Duty, is that every policyholder – regardless of their circumstances – receives a settlement that reflects the true cost of reinstating their property. Meeting that standard requires consistent pricing data, auditable processes, and technology that makes the whole chain, from first notification to completed repair, visible and manageable.

Structured estimating, connected workflows, supply-chain integration, and digital-first notification of loss are already embedded in parts of the market. So, the work now is about closing these remaining gaps – reducing fragmentation, improving data quality, and ensuring that the systems that are already in place can communicate and collaborate as effectively as possible.

Our view across the market gives us a clear picture of where those gaps sit and what it takes to close them, with the rigour and operational discipline that policyholders and regulators now expect.