If your current insurer says "no" to the mods, then
shop around. There
are companies who are mod-friendly: I've recently got a fairly good quote from GreenLight who quoted £557 for a 170bhp remapped
Ibiza FR TDI.
Shop around for some quotes before you get the remap and see what you can find.
Whether to declare your mods to the insurer is a personal thing. Personally, I wouldn't think of hiding it. The possible consequences of getting caught could be severe: you could be liable for tens of thousands of pounds of 3rd-party liability in the event of an accident, and you may find yourself on an insurance black-list where insurers will simply refuse to touch you
at all.
I also don't agree with people who say the insurers have no way of finding out about your remap. I'm not sure of this, but I suspect you might be able to detect many remapped cars using relatively cheap equipment that anyone can buy (I'm not going to give details, because hey - I don't want to give the insurers any hints!). If it costs a few hundred quid to collect the equipment and software necessary to detect a variety of remapped cars, that's tiny compared to the potential savings for the insurer.
Serial port remapping is a new and rapidly growing industry. Insurers may not have caught up with it yet, but it's only a matter of time IMHO. When they do catch up, it'll mean it's less sensible to conceal the remap from them - but the flip side is that the insurance industry might start being more willing to insure remaps once they know more about the statistical risks.