The Association of British Insurers (ABI) will combine general insurance with life and pensions under a new department.
A spokesperson for the trade body said that the new structure will "deliver benefits and value for money" for its shareholders.
It comes amid a reorganisation which has seen Nick Starling, Maggie Craig and Steve Gay all made redundant from its executive team with immediate effect.
The new department will report to the ABI's director of policy and deputy director general Huw Evans.
The spokesperson said that the department will be focused on key issues such as fraud, compensation reform and Flood Re and also paid tribute to the work Starling invested in securing the flood insurance agreement earlier this year.
Extensive review
"This is part of an extensive review of the ABI, restructures are happening throughout the market," he insisted.
"What we have done is restructure to ensure that as a membership-based organisation we are delivering value for money for members on the key priority issues, there will be no let-up in our lobbying work."
He continued: "We are not going to take our eye off the ball, we have just reviewed the way we operate to ensure it is cost effective.
"This reflects the changes that insurers are going through - they are all reviewing how they deliver value for money for customers and shareholders, we have to do the same for our members."
He insisted: "There is not trouble afoot, any responsible organisation will carry out a review from time to time. We are focused on our members and our members expect to get value for money."
The spokesperson maintained that although there will be "some disruption" there will not be any short-term let-up in its work.
He added: "We have got a reputation as a powerful and responsible trade association - the changes are designed to ensure we are more focused to deliver in this economic climate."
