I had the same problem with my iPhone 7 after updating to IOS 11.1.2 this past Sunday (11/19/2017). I lost all cellular connection after updating. Phone was hot and battery drained from trying to search for service the entire time. Went to my carrier (Verizon) on Tuesday, and the associate said I had no choice but to wait until Apple hopefully fixed the issue with their next update. No thank you. So I backed up my phone via iTunes and tried to restore it to factory settings. Restoration process wouldn't go through, and error code -1 kept occurring. Online research indicated hardware issue (because Apple's own website doesn't even list error code -1, only 1). What a coincidence, as it was not present prior to updating to iOS 11.1.2. So I went to the Apple support website to schedule a fix with an authorized shop. Went there today, the guy ran into error code 3, which he said also indicated a hardware issue. He tried to restore again and was fortunately successful, only this time a different notification popped up--the one you're being plagued with regarding the SIM. Took the suggestion from one of the users who replied here and switched out the SIM from my old iPhone 6S device. Phone successfully restored my back-up, no longer having a problem with reading the SIM.
To me, this means 2 things:
1) SIM cards, perhaps if they're "newer", can no longer be read by your iPhone. (Unless, maybe, you have the iPhone 8 or iPhone X. This is just conjecture, since all these iOS updates are being released with the new iPhones in mind because the rest of us don't matter. Lol.) And this is all due to the iOS 11.1.2 update. Any other iPhone with "newer" SIM cards will not read your SIM if you try to restore. I got my iPhone 6S in early 2016, for reference, so SIM cards that were manufactured around that time may work if you have any on hand.
2) I will be switching to the Google Pixel.
I've always frequented these boards without giving account of my own experiences because I was too lazy. Thought I should pay this knowledge forward before I peace out.