Insurance news

Regulatory reforms sought by brokers are progressing through Parliament, but a possible increase in insurance premium tax remains a concern ahead of the budget. 

Graeme Trudgill, chief executive of the British Insurance Brokers’ Association (BIBA), said the Financial Services and Markets Bill includes all four regulatory changes the association sought. Securing that legislation was BIBA’s leading manifesto ask, and the bill was announced in the King’s Speech in May. 

The bill completed its passage through the House of Lords in September before passing to the Commons. 

What the bill could change 

BIBA’s four priorities are reform of the Financial Ombudsman Service (FOS) so it takes greater account of Financial Conduct Authority (FCA) rules and case law, simplification of the senior managers and certification regime, faster authorisations and provisional licences for new firms. 

The bill would cut the statutory deadline for determining senior manager applications from three months to two. Trudgill said provisional licences would allow new firms to begin operating on a limited basis while seeking full authorisation, including signing agencies and taking on clients. For a new brokerage, “what takes the longest time is the regulatory permissions”, he said. 

The FCA has been simplifying insurance rules in parallel. Following its May 2025 consultation, it confirmed changes in December aimed at reducing costs and making requirements more proportionate. Its latest consultation, CP26/22, proposes further simplification, including changes to the disclosures insurance intermediaries must give clients. 

Trudgill cited the requirement for brokers to disclose whether an insurer holds more than 10% of their brokerage, information he said matters to the regulator but not the client. 

“They care about what’s their premium, what’s their excess, what aren’t they covered for? What are they covered for?” he said. 

He credited the FCA for working constructively with BIBA over the past couple of years and said the association is not opposed to regulation. 

“It’s the frictional cost that we’re trying to reduce. It’s the delays we’re trying to reduce,” he said. 

The budget risk 

John Healey will deliver his first budget as chancellor on 28 October. Trudgill said brokers have “battled quite a few tight budgets” in recent years, and insurance premium tax (IPT) remains a potential source of revenue when the Treasury needs income. 

IPT receipts reached a record £9.04bn in 2025/26, according to HMRC figures. BIBA describes it as a tax on protection that contributes to underinsurance and uninsured driving. 

“We think it would be a mistake to look at that because they want growth,” Trudgill said. “This would have a negative effect on growth.” 

An increase would add to the cost of cover at a time when the government wants to control inflation, he said. Research commissioned for BIBA’s 2025 manifesto found that 40% of businesses would pass on the cost of an IPT rise to customers. 

BIBA would also welcome changes to the employer National Insurance increase, which Trudgill said had been unpopular with members, although he was unsure whether a reversal was on the government’s agenda. 

Keeping reforms moving through political change 

Ministerial turnover has added another challenge. Lucy Rigby returned as City minister in July after Rachel Blake held the role for two months. 

“That’s a lot of change on a really important brief of financial services,” Trudgill said. 

BIBA maintains relationships with the Treasury’s insurance team and runs a contact programme with MPs, including parliamentary private secretaries who could become ministers. It also continues to work with the new Department for Business, Innovation, Science and Trade on cyber insurance, with government data showing just 10% of UK businesses hold a dedicated cyber policy. 

Political neutrality underpins that work. Trudgill attended the Labour conference, which he described as the most positive he had attended in a long time, while BIBA’s new head of public affairs, Amy Cox, attended the Conservative conference to meet senior opposition MPs and shadow ministers. The association talks to all parties, he said. 

Given five minutes with Healey before the budget, Trudgill would ask him to get the bill through quickly and leave IPT unchanged. The reforms could reduce the time and cost of running a brokerage; a tax increase would add to the bill clients face for buying protection. 

Early results from a LinkedIn poll by Insurance Business UK (IBUK) suggest readers are wary of standardising cyber insurers’ core wordings, with most voters preferring to leave insurers to compete.

Cast your vote and see the latest results here

Of the first 34 votes, 56% said insurers should be left to compete on wordings, and a further 12% said better comparison tools would do more than common wordings. Just 32% backed standardising core cyber cover across the board, while limiting standardisation to triggers and losses drew no votes.

The poll follows IBUK‘s interview with Gülsah Dagdelen, head of cyber at Tokio Marine HCC International, who said two cyber policies can share the same core sections and still respond differently to the same incident. The difference often lies in how triggers are defined and how a loss is calculated.

“We see clauses that are being drafted on a named peril version or on an unnamed, unintentional, however-caused basis,” Dagdelen said.

She said the triggers for business interruption and third-party loss, and the way losses are calculated, could be standardised without limiting insurers’ ability to innovate. In a soft market, though, insurers want to stand apart, and standardised approaches to some coverages are disappearing again.

That push to differentiate is already visible. CFC this month updated its Cyber Proactive Response policy to cover senior executives personally targeted in attacks, add affirmative AI wording and extend the business interruption indemnity period from 12 to 18 months. The product was launched in April 2025 for businesses with revenues of up to $250 million, and CFC had already folded similar affirmative AI language into its financial institutions suite.

Brokers’ trade body has already flagged policy language as a barrier. In its 2026 manifesto, the British Insurance Brokers’ Association (BIBA) committed to increasing take-up of stand-alone cyber cover by demystifying policy language, alongside broker training. BIBA associate member Broker Insights put stand-alone cyber take-up at just 2.8%, according to BIBA.

The question is also on the broking community’s agenda. Sam Cheshire, head of cyber, UK retail, at Gallagher, said it was a hot topic amongst brokers, underwriters, and the BIBA Cyber Committee, of which he is a member. He sees a middle ground in common definitions rather than common wordings.

“I think standardised wordings is one thing. I think standardised definitions is another question, i.e., we allow the insurers to provide flexibility on their cover, but they have to define business interruption in the same way,” Cheshire said.

He said dependent business interruption could be defined consistently too.

“I’ll be very interested to see what your poll says,” he said.

The question matters because cyber incidents are common: 43% of UK businesses reported a breach or attack in the past 12 months, according to the government’s Cyber Security Breaches Survey 2025/2026. Research from Hiscox London Market has also found that cyber is the risk most likely to set off others, so a single attack can leave losses falling across several policies with different triggers and wordings.

Early voters sided with competition rather than the middle ground Dagdelen and Cheshire describe. Should the market agree on how core cyber cover responds, or is competition on wordings serving clients better? Readers who have seen two policies respond differently to the same claim can share their experience in the comments on the LinkedIn post.

Read the full story: Cyber policies can look identical until a claim exposes the difference

The UK insurance industry has a talent problem that sits beneath the transformation conversation and is rarely named directly. It is not a shortage of technology skills, although those are in genuinely short supply. It is a shortage of people who have both – who understand how insurance works well enough to know what needs to change, and understand technology well enough to change it.

More than one quarter of UK insurance staff are already over 50, according to RSM UK research. Half of the current workforce could retire in the next 15 years, taking decades of tacit underwriting and claims knowledge with them. At the same time, Gallagher‘s 2026 AI Adoption and Risk survey found that more than half of businesses cite a shortage of AI-ready talent as a primary barrier to implementation. Graduate vacancies in the insurance sector fell 18% in 2025. The pipeline is thinning precisely as the need for transformation-capable talent is accelerating.

Paul Waring, director of IT and CISO at Blagrove Underwriting Agency, names the specific gap that technology programmes consistently underestimate. “The biggest challenge by far is always the domain-specific knowledge in insurance, because most people don’t deal with insurance, certainly not the complex or technical aspects of insurance, on a daily basis,” he said at the Insurance Business UK Leaders Network’s digital transformation roundtable.

The comparison he uses is instructive. “It’s not like going to work for a supermarket where everyone kind of knows what a supermarket looks like.” A technology hire in almost any other sector arrives with at least a working consumer understanding of the industry they are entering. An insurance technology hire typically does not. How premium tax works, how commission structures operate, how claims processes function – none of this is general knowledge, and all of it is necessary context for making sound technology decisions in an insurance business.

The skills audit is only half the answer

Waring’s response at Blagrove has been methodical. A skills matrix mapping the technology capabilities the business needs against what it currently has produces a clear picture of where training can close gaps, where hiring is required, and where capacity constraints – rather than skill deficits – are the primary limitation.

“When we bring in technical people, we have to build up their insurance knowledge gradually – things like how does insurance premium tax work, how does commission work, how do claims work,” he said. “It’s not just the technical knowledge, but it’s the domain-specific insurance knowledge that’s always the big challenge.”

The skills matrix can only capture what is already known. Building the insurance knowledge incoming technology staff need is not something a skills audit addresses. It requires deliberate investment in induction, mentoring, and structured exposure to the business – investment that most transformation programmes underinvest in because the return is not immediately visible on a programme timeline.

“It’s sometimes not seen as perhaps the most exciting or interesting industry,” Waring acknowledged. “I think it is, but I’m probably a bit unusual in that amongst tech people.” The perception problem compounds the pipeline problem: the sector that most needs domain-technology crossover talent is also the sector that struggles most to attract it.

The hive mind model

George Dagnall, NED at Hotspot Cover and director of insurance and partnerships at Concentrix, describes an approach to closing the domain-technology gap that he characterises as building a crossover “hive mind” – people who have absorbed enough of both worlds to translate effectively between them.

“Hiring talent that is aligned to transformation work but has an interest in this area. And the first point, of course, is to make sure that they understand our area, they learn how it works, they digest everything before they start trying to think about the tech development,” he said.

The risk of moving too fast is concrete. “If you bring in someone who’s tech-focused, they’ll say, ‘You can do this. You can change this. It’s fine.’ But then only until they start to digest and understand the systems and the reason why the systems work, they go, ‘Actually, that way of technological development is going to cut off what you’re doing here.'”

Technology decisions made without insurance domain understanding do not just produce suboptimal outcomes. They can undermine the existing business while the firm is still depending on it. The investment of time Dagnall describes – getting technology hires to absorb the business before they start changing it – is front-loaded and invisible on a programme timeline. It is also the cost of not making expensive mistakes later.

“Both parties teach each other,” Dagnall said. The insurance expert learns what technology can do. The technology expert learns why insurance processes exist. Out of that exchange comes the capacity to redesign workflows that are genuinely better rather than merely different. “We have to elevate the subject matter understanding – blending that human wisdom with the digital toolsets.”

The institutional knowledge problem

Eugene Owusu, director of transformation and global compliance at Liberty Mutual Insurance, names the dimension that compounds the talent problem over time. At Liberty, the people who have built institutional knowledge of jurisdictions, products, client outcomes, and regulatory obligations are the backbone of transformation rather than the obstacle to it.

“Having our subject matter experts who know their jurisdictions, they know their products, they know the work that they do, they know their customers and what the right outcomes are for those customers – they’ve very much been involved in that transformation work because they bring a certain level of understanding of our culture and our focus on integrity when it comes to dealing with our clients, which you can’t simply get by hiring,” he said.

Owusu’s approach is to retain that knowledge within transformation processes rather than treating transformation as something done to the existing workforce. “What we do is use that knowledge, making sure that they are trained or retrained. With any change, there’s a level of being retrained and understanding what the new world looks like.”

The UK government’s AI Skills Hub, expanded in January 2026 with £27 million in funding, targets 10 million workers with AI skills by 2030. A Level 4 AI and Automation Practitioner apprenticeship standard launched in March 2026. These are useful signals at the national level – but there is no insurance-specific equivalent, and the domain knowledge gap that Waring identifies is not one a general AI skills programme can close. That is the gap the industry needs to close internally, deliberately, and earlier in the hiring process than most firms currently do.

The firms that navigate the next decade of insurance transformation most effectively are those that treat the domain-technology crossover as a structural investment rather than an onboarding problem. It does not happen on its own. It cannot be hired in ready-made. And the cost of not building it shows up later, in decisions that looked technically sound and turned out to be operationally wrong.

The FCA has chosen not to introduce an AI-specific rulebook. It has instead applied its existing principles-based framework – Consumer Duty, the Senior Managers and Certification Regime, SYSC governance requirements, and operational resilience obligations – to AI use cases. The message to regulated firms is clear: as the FCA’s chief data officer Jessica Rusu put it, SM&CR and Consumer Duty together provide “enough regulatory bite that we don’t need to write new rules for AI.”

That message is simultaneously reassuring and demanding. Firms do not need to build an entirely new compliance framework. But every AI deployment must be defensible within accountability structures that were not designed for algorithmic decision-making – and must remain defensible as the technology evolves faster than annual regulatory reviews can track.

For UK insurance firms and brokers, where AI adoption is running ahead of governance maturity, that gap is where the real exposure sits.

What the regulatory framework requires in practice

The FCA’s Consumer Duty, in force for all products and services since July 2024, requires firms to produce good outcomes for customers and demonstrate, on an ongoing basis, that they are doing so. Applied to AI, this means a model influencing pricing, claims handling, or customer communications must be monitored for outcomes, auditable for decisions, and explainable when challenged. The accountability for that model’s behaviour sits with an identified senior manager under SM&CR.

The FCA’s June 2024 multi-firm review of insurance outcomes monitoring found wide variation in quality across the sector. As AI is integrated into more of the processes driving those outcomes, firms with weak monitoring frameworks are increasingly exposed – not to a future AI-specific regime, but to the Consumer Duty obligations already in force.

The data picture reinforces the urgency. Gallagher‘s 2026 AI Adoption and Risk survey found that fewer than half of businesses have adopted formal risk management frameworks for AI, even as most are now implementing AI solutions. Among UK firms, 56% rated their AI knowledge as beginner or novice. Having a governance framework on paper is not the same as operating within one in practice – and the FCA review of outcomes monitoring has already demonstrated that it can tell the difference.

The integrity-first approach

Eugene Owusu, director of transformation and global compliance at Liberty Mutual Insurance, frames AI governance in terms that go beyond regulatory compliance. “Key for me is making sure that conversations include the right SMEs and the right regulatory knowhow, because at Liberty, one thing that we’re keen on is making sure that it’s integrity first.”

That distinction is vital. A compliance-first approach to AI governance asks: what do the regulations require? An integrity-first approach asks: what decisions is this system making, can we stand behind them, and can we demonstrate to our customers and our regulator that we can? The latter is more demanding and produces more durable governance – because it does not stop at the regulatory minimum.

Owusu is specific about what AI is actually delivering at Liberty: an acceleration of data work that previously took significant time. But the emphasis on data lineage, on people taking ownership of data quality, and on migrations landing with the right data in the right systems reflects a measured posture – AI as an accelerant for work that still requires human judgement and regulatory accountability, not a replacement for either.

Where governance depends on people, not systems

George Dagnall, NED at Hotspot Cover and director of insurance and partnerships at Concentrix, works in lines where the human judgement dimension is not theoretical. In medical crisis response, kidnap and ransom, and related specialist areas, the knowledge required to respond effectively cannot be reduced to an algorithm. “Those skills and that development cannot be easily replaced by just hiring tech-native individuals,” he said.

That observation reaches beyond specialist lines. The governance of AI in any insurance context depends on people who understand what the system is deciding and can evaluate whether those decisions are sound. A firm whose workforce lacks the domain knowledge to interrogate AI outputs cannot govern those outputs in any meaningful sense – and under SM&CR, the named senior manager responsible for a model’s behaviour needs to be able to demonstrate that the governance is real.

Paul Waring, director of IT and CISO at Blagrove Underwriting Agency, draws the same line from the technology side. At Blagrove, the in-house model means every change to the production system – made several times a week – is a change the firm’s own people understand, have tested, and can account for. That level of transparency is harder to maintain when the capability sits with a vendor. It is not impossible, but it requires deliberate governance investment rather than assumption.

The gap the FCA is watching

The FCA’s position is that the governance obligation exists from the moment AI is deployed, not from the moment a regulatory review arrives. The accountability framework is the existing one. The technology is the new variable.

For a broker or insurer deploying AI in customer-facing processes, claims handling, or pricing, the starting question is not “what does the FCA require of AI?” but “how does this deployment interact with our Consumer Duty obligations, our SM&CR accountability map, and our operational resilience framework?” Those questions have answers. Working through them before deployment, rather than after a supervisory visit, is the difference between governance and compliance theatre.

A customer complaint or operational problem can escalate into multiple claims before a business has considered how to fund its defence, according to Rory Wilson, director of business development at Amberis, an independent after-the-event (ATE) insurance broker based in Manchester. 

Wilson said litigation exposure now extends well beyond the contract disputes and negligence claims businesses have traditionally associated with legal risk. 

“Litigation risk has certainly become broader,” he said. “Now there are a number of issues that can come out of regulatory change, consumer protection, data breaches, financial products, social media, and the rise of AI.” 

When one problem becomes multiple claims 

That broadening has been amplified by the growth of litigation funding, which can turn individually low-value claims into coordinated, high-volume actions against a single business. 

“There’s group and high-volume litigation which is on the rise, supported by ATE insurance but also third-party litigation funding,” Wilson said. 

Businesses can misjudge both the scale of that exposure and its consequences. Reputational risk, he said, is “just as important as legal liability”, with the scrutiny and cost of proceedings potentially affecting a business long after a case concludes. 

“You could underestimate how a simple operational issue can become a legal issue, and on what scale,” Wilson said. 

A single customer complaint or regulatory investigation, he said, can escalate into “multiple claims or a coordinated group action”. Businesses outside the legal sector are often unaware of how quickly that landscape can shift “until suddenly a lot of claims land at their door.” 

Economic pressure is changing the calculation too, with businesses weighing the cost of defending a claim against the commercial outcome. 

“It’s no longer perhaps, can we successfully defend this claim,” Wilson said. “It’s perhaps now, what’s the best commercial outcome, what’s going to cost us the least.” 

Legal reforms that have reduced recoverable costs in some areas have encouraged innovation in funding, before-the-event and after-the-event insurance, and dispute resolution, he said, as businesses seek greater certainty over litigation costs. 

The wider funding landscape remains under scrutiny. Following the Civil Justice Council’s review of third-party litigation funding, the government committed in December 2025 to legislating for proportionate regulation, saying legislation would be introduced when parliamentary time allowed. 

The case for considering cover earlier 

The distinction between cover for pursuing a claim and cover for defending one is central to Wilson’s warning. Businesses should consider before-the-event cover ahead of any dispute, he said, rather than assume insurance will be available once proceedings are underway. 

“Businesses may believe that there is a litigation insurance that they could purchase after proceedings have started,” he said. “That can be extremely difficult.” 

ATE is generally used by claimants to pursue litigation. For businesses defending claims, brokers can work with specialist defendant litigation insurers on arrangements that help them plan financially for those costs. 

Wilson said litigation insurance should form part of a firm’s wider risk management strategy, helping protect capital and control potential legal costs. Treating it as “a necessary evil” can obscure its role in longer-term commercial planning. 

“The access, education and tools for claimants to pursue claims has never been higher,” he said. 

AI adds another litigation unknown 

Wilson expects intellectual property disputes involving AI to become an increasingly important source of commercial litigation. 

The issue is already being tested in the courts, including the UK High Court’s November 2025 ruling in Getty Images v Stability AI, which examined how existing intellectual property law applies to generative AI. 

The question extends beyond developers. Businesses buying and using AI tools may also have to consider what liability they could face if outputs infringe third-party rights. 

Reflecting on his own firm’s use of AI, Wilson said it was unclear how businesses could establish whether outputs drew improperly on other people’s work. Responsibility was also uncertain, he said, when a business paid significant sums to use an AI platform and its output subsequently became the subject of an infringement claim. 

His broader concern was that businesses could use material without recognising its origins or having much control over the output. 

As these exposures develop, the timing of insurance discussions becomes more consequential. Brokers do not need to predict the next claim to help clients assess the legal costs they could carry themselves. Waiting until a dispute emerges may leave businesses with fewer options for transferring that risk. 

John Elliott (pictured) wanted to run a brokerage where he could give clients the time they needed and make his own placement decisions. After 25 years in commercial insurance, the managing director of Elliott & Associates Risk Management concluded that the quickest way to get there was through a network, not on his own. 

He launched his own Coversure Network franchise in August, combining his own client relationships with the network’s compliance backing and insurer access. 

Why a franchise rather than going it alone 

For Elliott, independence means sitting down with a client and doing what is right for them “regardless of the earnings, regardless of the relationships that you’ve got with your panel.” Large brokerages may offer wide panels, he said, but they work to a business plan and a placement strategy. Nobody instructs a broker how to place business, yet “it’s definitely implied that you are supposed to be doing things in a certain way.” 

He spent seven or eight years weighing his options, including direct authorisation by the Financial Conduct Authority (FCA). That route costs considerably more and takes far longer to get regulated, he said. The franchise let him concentrate on clients from the start, with compliance already running in the background. 

The trade-off is the panel: he can choose which clients to approach and how to run the business day to day but must place cover through the network’s panel. He does not see that as a dilution of independence. Most markets set minimum requirements for agencies, and a new brokerage without a book to bring across would struggle to meet them on its own – “there is no way you’re going to get the agencies that you would need to be able to trade.” He regards the constraint as short-term, since he can leave the network and go fully independent once the business can support it. 

How placement decisions are made 

At larger brokerages Elliott said, brokers may be told which insurer to use from a small group, perhaps half a dozen. He puts that down to income arrangements behind the scenes: “it comes down to the fact that they may have overriding deals. It’s as simple as that. There’s other incomes coming in. There’s other things that have been agreed.” This reflects what Elliott has seen in his own career, not a claim that every corporate brokerage builds its panel this way. It sits directly on top of the FCA’s own guidance on panels used for fair analysis, which says selection should take account of product features, premiums and service to customers, and should not rest solely on the benefit to the brokerage. 

That extends to leaving a client’s unusual cover with a niche underwriter or MGA where it is, if the insurer relationship is sound and the problem lies with the broker rather than the risk. “I’ve never sold anything in my life,” he said. “All I do is ask questions and I’ll come up with a solution for the client.” 

Size thresholds can also decide which clients get attention at bigger firms. “I’ve even been told if it wasn’t generating £2,500 income as a client, you do not go and see it,” he said. A client worth £600 could be turned away outright, with nowhere in the business to refer them – and Elliott has known small construction businesses worth a few hundred pounds in commission at the outset go on to become substantial.  

To avoid making the same call himself, he plans to take on no more than 15 to 20 clients a month, so they get “the personal service that they’re paying for,” hiring only once demand exceeds that. At some brokers where he has worked, staff handled 80 or 100 clients a month, making it impossible to look after each one properly. 

The SME middle ground 

That’s the gap Elliott is targeting: businesses paying roughly £10,000 to £50,000 in premium. Below that level, he said, a lot of package business runs through online portals, usually under £5,000 and often under £2,500. Insurers compete hard for risks of £50,000 and above. The band in between gets far less attention from either end of the market. 

Part of the problem is definitional. “Many brokerages don’t really understand what SME actually is because the definition of SME can be up to £50 million turnover,” he said – and under the Companies Act’s recently raised thresholds for medium-sized companies, the official figure is now £54 million. Many clients in his target band arranged their insurance when they employed five or six people, and kept renewing it after growing to 30 staff and a turnover of £2 million or £3 million. They often do not understand how their exposures have changed, and in construction specifically he has seen significant gaps in cover as a result. 

Elliott sees a large opportunity for brokers willing to serve that middle market properly, provided they don’t overstretch and turn into mini corporate brokerages themselves – a discipline that even independents who’ve deliberately stayed outside the current M&A slowdown are wrestling with, as ownership decisions increasingly hinge on what a small business can actually handle on its own. What that discipline buys is attention: a regional broker has won clients by catching what phone-based service missed – an undeclared log burner, a fire extinguisher used as a doorstop – simply by visiting in person. 

Those changes take time to uncover. Elliott’s case for the franchise model is that it gives him the insurer access to compete for that business while letting him keep enough room in his diary to notice when a client has outgrown its cover. 

Insurers are competing harder for UK mid-market business, but a cheaper quote does not necessarily mean a broader underwriting appetite. As commercial rates continue to fall, brokers have more room to negotiate on property and liability placements. Rob Carslake (pictured), head of London, mid-market at Allianz UK, said that can mean improved wordings, more flexible deductibles, multi-year agreements and service commitments, as well as lower premiums.

The harder question is whether an insurer will consider risks it previously declined, or simply offer better terms on business it already wanted. Carslake said insurers naturally have more flexibility with risks they know well, making that distinction difficult to judge from pricing alone.

“The real test of appetite expansion is whether an underwriter is willing to consider opportunities they may have not historically pursued, while remaining within their risk appetite and underwriting framework,” he said.

Put appetite claims to the test

Carslake said brokers can establish how far an insurer’s appetite has moved by asking which sectors it is more willing to consider and why. The discussion can then turn to the characteristics of an individual risk: what would make an underwriter comfortable supporting it, and what expertise or capabilities has the insurer developed to pursue that business?

Those questions are more revealing than a general statement about growth. An insurer may be willing to quote more competitively across its existing book while remaining selective about unfamiliar trades or more complex exposures. For Carslake, the evidence of expansion lies in the decisions underwriters can make and their willingness to engage with a risk that does not fit neatly into established classifications.

“Growth isn’t just a statement in an insurer’s marketing literature,” he said. “It’s reflected in the decisions underwriters make, the authority they have to act and their willingness to engage in conversations about new opportunities.”

Regular conversations also give brokers a chance to learn where appetite is changing before a specific placement becomes urgent. That can help them identify the right market for a client and understand what information an underwriter will need to make a decision.

What helps an underwriter say yes

Broader appetite does not remove the need for a strong submission. Carslake said underwriters need a clear picture of a business, including its management, risk controls and future plans, rather than the minimum information needed to seek a quote. Sector knowledge and a well-presented account of the exposure help them judge the individual risk, rather than relying on its trade classification alone.

“Strong underwriters don’t lower standards to achieve growth,” he said. “They use their expertise to distinguish between a challenging risk that can be improved and one that is outside appetite.”

That leaves room for a conversation about what could change an underwriter’s view. A risk may need better controls, clearer evidence of how it is managed or a different programme structure. A submission that explains those points gives the underwriter more to work with than one built around the prospect of a lower premium. Allianz has also emphasised understanding a client’s business in depth in its approach to large mid-market broker relationships.

Carslake said the strongest negotiating position comes from customer insight, the quality of the risk presentation and relationships built over time. Those factors matter when seeking terms now, but also when considering whether a programme will remain sustainable as the market changes.

When competition stops helping

Greater competition gives brokers more to compare than price. Claims performance, service after placement and consistency in underwriting can all affect the value of an insurer’s offer, particularly if a client needs support during a difficult claim or at a future renewal.

Carslake said competition can improve service and customer outcomes, but said decisions driven chiefly by short-term market pressure work against that. “Healthy competition drives innovation, service improvement and better customer outcomes,” he said, but customers “aren’t looking for innovation at any cost. They want clarity, fairness and reassurance that their insurer will respond in the right way when it matters.”

Every broker polled in Ascend Insurance Holdings’ survey expects the soft market to plateau by the fourth quarter of 2026. If it does, the test will be whether insurers remain willing to support risks beyond their established book.

The UK’s consultation on a new captive insurance framework marks a significant and welcome step in offering a complete range of risk transfer tools here in the UK. The consultation, launched this summer by UK regulators, follows the Government’s commitment to create a genuinely competitive and bespoke framework for captive insurers. The proposed regime is expected to come into force in 2027 and has been widely welcomed across the market as one of the most important developments in UK insurance competitiveness for many years.

Perhaps most importantly, the consultation demonstrates that HM Treasury, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have listened carefully to what has been said by market and industry professionals. The PRA has engaged extensively across a wide range of stakeholders and produced proposals that are more ambitious than many expected. The result is a framework that has the potential to establish the UK as a credible and attractive captive domicile while maintaining appropriate regulatory standards.

Captives have historically been subject to the same regulatory treatment as commercial insurers, making it difficult and often uneconomic to establish them in the UK. The consultation recognises that captives present a different risk profile and therefore require a more proportionate approach. This reflects a commendable willingness by the PRA to adapt regulation where appropriate in support of growth and competitiveness.

Several aspects of the proposals have received particularly strong support from market participants.

First, the decision to create a dedicated captive regime rather than relying solely on proportionality within the existing Solvency UK framework is seen as a significant achievement. A bespoke regime provides greater clarity and certainty for businesses considering establishing captives in the UK.

Second, the proposed reduction in capital requirements is widely welcomed. The simplified capital approach is viewed as more closely aligned with the underlying risk characteristics of captives and represents one of the consultation’s most important reforms.

Third, the PRA’s commitment to a faster authorisation process has been particularly well received. A target approval timeframe of four to six weeks, supported by a dedicated supervisory team and pre-application engagement, signals a genuine commitment to improving the user experience. For a market where speed and predictability are key factors in domicile selection, this represents a meaningful cultural shift.

Finally, the proposed reductions in reporting and governance requirements have been welcomed as a sensible recognition that captives should not face the same regulatory burden as large commercial insurers. Together, these measures suggest a regulatory approach that is both proportionate and pragmatic.

While the market’s response has been overwhelmingly positive, stakeholders have identified several areas where further development would enhance the regime’s attractiveness. The most frequently raised issue is the initial restriction to single-parent captives. Many view this as a sensible and practical starting point but would ultimately like to see the framework expanded to include group captives, association captives, mutual structures and protected cell companies. A clear roadmap for future expansion would provide additional confidence to potential users.

Tax competitiveness also remains an important consideration. While tax policy falls outside the PRA’s remit, domicile decisions are inevitably influenced by the combined impact of regulation, capital requirements, tax treatment and operational costs. For UK-headquartered firms, however, a domestic captive regime could still deliver meaningful benefits through simplified governance and reduced complexity.

There is also interest in how governance expectations, business line restrictions and re-domiciliation arrangements will evolve over time. Encouragingly, the PRA’s ongoing willingness to engage with industry participants suggests these issues will continue to be explored as the market develops.

Ultimately, the success of the regime will depend not only on the rules themselves but on consistent delivery. Stakeholders will want to see authorisations processed quickly and supervision remain proportionate in practice. The signs so far are encouraging. The PRA deserves considerable credit for the openness of its engagement and the ambition of its proposals.

The London Market Group strongly welcomes the progress made to date. This consultation represents a major opportunity to broaden the UK’s insurance offering, strengthen international competitiveness and position the UK as a leading destination for captive insurance. We look forward to continuing to work with regulators as the framework is refined and implemented.

Aviva‘s ghost broking cease and desist notices have doubled, and its website takedowns have risen more than eightfold, compared with 2025. The insurer disclosed the figures as it responded to Ofcom’s consultation on its Fraudulent Advertising Codes of Practice, backing the regulator’s proposals for tougher action against online insurance fraud.

Aviva did not publish the underlying numbers. It attributed the rise to its application fraud teams working closely with law enforcement, but said a more joined-up effort was needed to tackle the problem.

The consultation opened on July 10 under the Online Safety Act 2023 (OSA). It sets out nearly 40 draft measures that would require the UK’s largest platforms to police paid-for advertising. Ofcom plans to publish its final statement by mid-2027.

“At Aviva, we’re seeing how tech is scaling the threat posed by fraud,” said Owen Morris, CEO personal lines at Aviva.

A growing problem

Ghost broking, in which criminals sell fake or invalid policies, often through social media, has grown steadily as platforms give fraudsters access to price-sensitive audiences. The Insurance Fraud Bureau (IFB) recorded a 52% rise in cases between 2022 and 2024, a trend that has extended into AI-generated fake policies that bypass insurers altogether. Action Fraud logged 870 reports of insurance broker fraud in the year to September 2025, a 12% increase on the previous year.

Young drivers are most at risk. Research published by the FCA in May found that 49% of young drivers had bought insurance through social media or messaging apps. In the same research, 39% said they were not confident identifying a fake policy.

Cost-of-living pressure adds to the exposure. One in seven young drivers said they struggled to fit insurance into their monthly budget, making artificially cheap ghost-brokered policies harder to dismiss. A fake or void policy leaves the driver uninsured, which is a criminal offence in the UK.

What Aviva wants from platforms

Aviva backs the Association of British Insurers’ (ABI) call for mandatory verification of financial services advertisers. Platforms would have to confirm that an advertiser’s activity matches its FCA authorisations, including whether it has genuine authority to sell, arrange, introduce or promote the products concerned, before any insurance advert can run.

It also wants fraudulent content removed faster, pointing to the direct link between how long it stays live and the extent of consumer harm. And it wants platforms to contribute more proportionately towards enforcement and victim support.

Under existing rules, platforms have no binding duty to verify financial services advertisers before allowing paid adverts to run. Ofcom’s draft code would close that gap for Category 1 and Category 2A services, although its final statement is not expected before mid-2027. Google has run FCA verification for UK financial advertisers since 2021, and Meta has its own scheme, but both remain voluntary.

Morris said Ofcom needed to follow through on its proposals “to ensure that fraudulent content is identified and removed before it has the chance to do real harm to the public”. He also called for a new coalition of financial institutions, platforms, consumer groups, regulators and law enforcement “to share both real-time intel and discuss broader trends”.

“Social media platforms are key to these efforts,” he said. “We encourage them to work with the insurance industry to establish better intelligence sharing and cooperation. We would also like to see the platforms contribute more proportionately towards enforcement and victim support.”

Morris placed ghost broking within a wider pattern of technology-enabled fraud, including investment scams and finfluencers promoting unregulated financial advice. “Without this new regulation, as well as more joined-up enforcement, we risk more of the public falling victim to these scams,” he said.

What it means for brokers

The eightfold rise in Aviva’s website takedowns points to a volume of fraudulent activity that insurer-by-insurer enforcement cannot address at scale. That is the central argument behind the industry’s push for binding platform obligations.

Legitimate brokers have a direct stake. Ghost brokers often trade on the credibility of real firms, and Aviva’s own guidance to consumers is to check a seller’s BIBA membership and FCA registration before buying. Brokers can reinforce that message with clients, particularly younger drivers, and watch for any impersonation of their own brand on social media and messaging apps.