Most, if not all, newer hot water tanks come pre-insulated. If you have an older hot water, however, you may find it does not have an insulated shell. If this is the case, installing an insulated jacket to your hot water tank will save you a considerable amount of energy and money.
The principle of the hot water tank is to generate a body of hot water in a short period of time, using your boiler at its most efficient, then storing the water for later use, a bit like boiling your kettle to fill a thermos flask. If the tank is not well insulated, the heat will radiate out and heat everything around it, lowering the temperature of the water within, which in turn will mean the boiler will need to run again to top up the heat. A well insulated tank will keep the water hot for a longer period, therefore reducing the requirement on the boiler.