Is a ‘fail fast’ approach to innovation effective or overhyped?

With the appetite for innovation in digitalisation and artificial intelligence (AI) on the rise, firms have been eyeing up opportunities to modernise their processes – whether that be by partnering with insurtechs or building AI-dedicated internal teams.

A Charles Taylor report entitled From Legacy to Leadership: The Digital Journey of UK Insurer, published in September 2025, revealed that 94% of insurance companies were championing digital modernisation as a strategic priority for their organisation.

But strategic priority and achievement are different things. So, how are firms bridging the gap between intent and execution?

With a shift in the landscape from entrenched risk aversion, the ‘fail fast’ approach has the industry in a firm grip.

To ditch traditional siloes and update claims processes, trailblazers have been rapidly adopting and integrating new innovations within short time frames to see if their solutions sink or swim.

At the Shaping the Future of Insurance conference on 1 October 2025, Paul O’Brien, group chief AI officer at Davies Group, told delegates that stakeholders should “pilot quickly and [not] be afraid to fail fast”.

He continued: “You don’t need to run a six month project to prove a specific AI use case or a specific AI agent.”

Having launched its Vision 2030 roadmap in January 2025, investing in technology and AI has been core to Davies’ five-year strategy.

Speaking to Insurance Times on this ethos, Dan Saulter, group chief executive at the firm, agreed with O’Brien, adding that to be “overly ponderous on the planning side” often hinders progress.

He said: “We’re better off trying things out with our clients to see if we can make improvements, if we can automate parts of the claims journey and improve parts of the claims journey.

“If, along the way, we find things don’t work, we will throw them in the bin and if we find things that do work, we’ll double down and invest more. It’s a well-trodden path for the tech businesses and we’re trying to borrow some of that best practice inside Davies.”

Why focus on failure?

For Saulter, as much as he “would love to have a world where you can never fail and you always win,” he believes that failure is an essential part of the innovation process.

Meanwhile, James Slaughter, group chief underwriting officer at Apollo, told Insurance Times that he rejects the term failing fast because “stakeholders are not going to buy into a principle where you’re failing constantly”.

He said: “We talk about innovation slightly in the wrong language because you’ve got to keep your momentum, which means you’ve got to keep your spirit and culture alive.

“It’s not always going to be sunny uplands. It takes time and you’ve got to learn those lessons because you feed those lessons back in and your ultimate product becomes better.”

Branding the term as a “classic cliché in innovation”, Slaughter explained that, at Apollo, failing “just means [something’s] not perfect” and it is “a chance to course correct or reflect and develop it further”.

Further, he noted that while failing fast leads expectations of quick and profitable results in the insurance industry “succeeding in innovation comes back to [being] patient”.

While the lessons learned may be less financially expensive, he explained that insurers would have to wait much longer for confirmation as to whether that approach has worked, given the length of the claims cycle.

He concluded: “Once you get the flywheel going it’s much easier to keep it going, but it can take effort to get it started.”

Risky business

When Jeremy Stevens, business line director for EMEA at Charles Taylor Insurtech, was asked whether he believes in the fail fast approach to innovation, his answer was “a firm no”.

From a customer perspective, he said he believed that the price of failure was simply too high.

He told Insurance Times that, as each insurer has to build and maintain separate systems for each type of insurance product, making a small improvement is technically complicated, while every change affects critical systems tied to policies and claims.

As a result, he noted that if a given new development did fail, there was a risk that the “policy could become invalid” and claims might not go through.

The risk of breaking live systems, he explained, was entirely avoidable because insurers “don’t have to” as that is the reason for having controlled “test environments”.

He continued: “There’s no point in causing yourself pain.

“It really doesn’t make any sense and you don’t want policies affected. If you think about motor [insurance], you want policies to be live, valid and current – and if nothing was working at night and you were driving around uninsured because something changed at the back end at the carrier, that would be a disaster.”

While the potentially dangerous impact on policyholders is a definite risk worth considering, Insurtech UK chief executive Melissa Collett said she focuses on the long-term vision.

She said: “AI-focused insurtechs are keen to partner with insurers.

“By rapidly adopting technology and piloting innovation early, both parties can quickly decide if the approach works. Slow no’s are not conducive to insurtech success.”

While this sink fast and pivot strategy has been echoed by all corners of the industry, it poses the question – is the race to innovate in live environments conducive to success, or will it become a pain point for insurers and policyholders?