REG Reviews

REG Reviews – August 2025

4th August 2025

Welcome to your August Edition of REG Reviews!

Last month, regulatory focus on data intensified, with the FCA stressing its role in driving better customer outcomes. Carriers signalled plans to expand MGA partnerships, while AI models emerged as a disruptive threat to price comparison sites. Meanwhile, REG prepared to roll out its new Business Profile and Smart Search features, designed to bring greater visibility, insight, and connection to the insurance market.

Read these articles and many more as we bring you all the important news and views in the insurance and financial services world…

Industry News​

data is a necessity to ensure regulatory adherence in the insurance industry

REGULATORY

Regulatory Pressure Makes Data a Business Imperative

Data is not just a regulatory bonus in the insurance and financial services industries, it’s a must. Data quality reporting is even more important to ensure firms stay out of watchdogs’ spotlight, according to compliance director Paul Bruns.

As part of the FCA’s strategic data plan is the appointment of Chief Data, Information and Intelligence Officer, Jessica Rusu, in order to take the regulators’ data analysis and compliance oversight capabilities one step further.

The FCA has increased its surveys to collect more data on areas like retirement advice and wealth management. This helps firms benchmark their services and improve customer outcomes.

Moreover, the Consumer Duty necessitates firms to use data to monitor performance, enhance services, and better understand customer outcomes.

While this step can seem daunting, the FCA will be using the Consumer Duty rule to not only monitor firms’ reports, but to also discover new trends to base future improvements on.

According to Paul Bruns, below are important areas where data helps intermediaries achieve positive outcomes for their clients.

  1. The role of data in supporting firms with ongoing reviews

The data below can be collected to help firms stay on top of their ongoing regulatory duties:

  • Number of customers signed up for ongoing reviews
  • Number of disengaged customers or those who switched service providers
  • The inputs needed to carry out these reviews
  1. The role of data in improving vulnerable customers’ outcomes

Bruns reports that the gathering the information below can improve outcomes for vulnerable clients:

  • The percentage of clients labelled as vulnerable in comparison to industry standards
  • The types of recorded vulnerabilities and the changes needed to better customer outcomes

Leveraging data enables firms to proactively identify and support vulnerable customers. By comparing internal numbers to expected vulnerability rates, companies can uncover discrepancies.

Understanding common vulnerability types helps firms provide personalised communication and advice, ensuring clients receive appropriate support.

  1. The role of client feedback data

Client feedback, both quantitative and qualitative, is crucial for firms to inform whether they’re delivering good outcomes or not. Bruns lists some important metrics to gather such as:

  • Net Promoter Score (NPS)
  • Satisfaction scores
  • Response rates to feedback requests and engagement levels

Leveraging data helps firms spot and better support vulnerable clients by identifying gaps and customising communication and advice based on common vulnerability types.

On an ending note, data is a fundamental piece of regulation that needs to be instilled at every stage of a business to help inform decisions and continuously deliver positive outcomes to customers.

ai puts insurance comparison websites in danger

TECHNOLOGY

AI Models Pose Major Threat to Price Comparison Sites

AI is transforming every aspect of business operations and simplifying customer experiences. In fact, AI models are now being used to compare insurance cover prices—replacing the need for traditional price comparison websites.

According to Sam White, CEO of Stella Insurance, AI large language models like ChatGPT will significantly impact price comparison websites’ use.

Now that customers can use ChatGPT and other AI models to automatically compare insurance prices with minimal information and efforts, comparison website need to work harder and innovate to avoid becoming obsolete.

White reported that using Stella has yielded to an in-depth comparison using multiple sources across the internet without having to actually type in any personal information.

As more and more customers integrate AI and other technology in their routine, AI companies will have to look for ways to make this a paid tool, even though White stressed the exact process of doing so is still unknown.

Moreover, insurance companies will also have to incorporate AI to expedite their customers’ journeys and stay one step ahead of AI models like Gemini, ChatGPT and more.

Most buyers want to have instant and easy access to the solutions they’re looking for, and with AI making it possible to get what we need in a click of a mouse, Freddy Macnamara, CEO of Cuvva concludes that people might steer away from price comparison websites.

So how will comparison website and insurance companies beat AI and stay ahead of the curve? Will insurers have to go beyond AI and large language models to keep up?

UK Strikes AI Deal

CYBER

UK Strikes AI Deal Aimed at Boosting Innovation

The UK government has signed an agreement with a leading US AI company, OpenAI, marking a renewed push to drive investment into artificial intelligence infrastructure and services across the country. 

The deal includes a commitment to explore further investment in UK-based AI operations, including the potential development of new data centres and expanded hiring. In return, the government has pledged to explore ways to use advanced AI tools in public services, spanning areas such as education, justice, and national security, to improve efficiency and user experience. 

The move forms part of a wider effort to position the UK as a global AI leader, building on its research and aiming to close the investment gap with countries like the US and China. In 2023, private AI investment in the UK reached $4.5bn, significantly lower than the US’s $109bn and China’s $9.3bn, according to Stanford’s AI Index. 

The partnership also includes an agreement to share information about model capabilities and security risks with the UK’s AI Safety Institute, reinforcing the government’s emphasis on responsible development. The AI firm’s technology is already being trialled in the civil service to assist with routine tasks, and the agreement could pave the way for more widespread adoption. 

However, questions remain about the long-term implications. Critics from the creative industries and civil society warn that the UK’s willingness to consider loosening copyright protections could benefit large tech players at the expense of local firms and rights holders. 

The government has committed £2bn to support AI growth zones and infrastructure, with similar partnerships also signed with other global AI firms. As the UK accelerates its AI ambitions, the challenge will be ensuring that strategic alliances strengthen, rather than sideline innovation. 

Insurance regulatory reform

REGULATORY

A New Era: Regulators Clear Path for Specialist Insurers

The UK insurance industry entered a new phase of regulatory reform as both the Financial Conduct Authority and the Prudential Regulation Authority moved to overhaul outdated requirements and streamline market entry for specialist insurers. The FCA announced a wide-ranging initiative to simplify conduct rules, including the removal of the 12-month product review obligation, elimination of prescribed continuing professional development hours for general insurance staff, and the introduction of a new classification for commercial clients that would lift certain retail-level consumer protections. The reforms are aimed at reducing compliance burdens and allowing insurers to tailor services more flexibly to the needs of large commercial buyers. Industry leaders and trade bodies have largely welcomed the move as a signal of regulatory alignment with London’s specialist market needs.

At the same time, the Prudential Regulation Authority confirmed finalised reforms to the Insurance Special Purpose Vehicle framework. These reforms include a new fast-track approval process, enabling qualifying ISPVs to be authorised in ten working days. This represents a significant reduction in application time, which previously ranged from four to six weeks. Streamlining of senior management requirements and operational guidance has also been introduced to make the UK more competitive for insurance-linked securities and structured reinsurance vehicles. The Treasury has opened a parallel consultation to amend the Risk Transformation Regulations, seeking to remove further legal and procedural barriers to market participation.

In a related move, the UK government confirmed that it will lower capital and reporting obligations for captive insurers that set up onshore. This is expected to attract new entrants previously operating offshore, with estimates suggesting the UK could capture several hundred captive firms in the coming years. The London Market Group has voiced strong support, citing it as an opportunity to expand the UK’s global reinsurance footprint. Alongside these changes, policymakers are encouraging investment in digital skills and AI training across insurance roles, recognising that regulatory innovation must be matched by workforce capabilities. These coordinated efforts aim to position the UK as a leading centre for commercial and alternative risk transfer while maintaining high standards of policyholder protection.

MGAs are strong strategic partners for insurers and carriers

ESG

MGAs Considered As a Strong Strategic Partner

57% of carriers are looking to increase the number of MGAs they work within the next two years, according to Clyde and Co’s 2025 MGA Opinion Report produced in collaboration with the Managing General Agents Association (MGAA).

Among the areas carriers are focusing on are property with 17%, financial lines with 20% and specialty lines with 29%.

The same report found that carriers value MGAs and consider them as fundamental partners thanks to their ability of being innovative, nimble and agile in their underwriting capabilities.

Clyde and Co’s report also found that 74% of carriers have kept or increased the number of MGAs they trade with regardless of increasing capital costs.

They reported that MGAs’ ability to underwrite complex and specialist risks makes them a strong strategic partner in helping insurers stay on top of changing market conditions.

According to Mike Keating, chief executive at the MGAA: “Far from being solely a niche channel, MGAs drive product innovation, accelerate digital transformation and provide carriers with the specialist insight needed to navigate today’s complex risk landscape. As trusted partners, MGAs are well-placed to help insurers adapt, grow and deliver greater customer value in a rapidly evolving environment.”

He also adds that: “With growing investment in AI and data, MGAs are increasingly differentiated by their ability to deliver tailored, tech-enabled insurance solutions.”

While MGAs are renowned for their agility, many of them have recently expressed their concerns about the current claims process, with 77% saying it needs to be improved.

Moreover, the regulatory burden still puts a major strain on the insurance industry as a whole, which in turn slows down growth.

In fact, Clyde and Co’s research found that 46% of MGAs and 34% of carriers reported Consumer Duty and Fair Value requirements as a major obstacle when it comes to MGAs introducing new products or penetrating a new market.

With technology, MGAs will continue to differentiate themselves in a complex and ever changing economic and regulatory environment by automating the most pressing tasks, enabling them to stay resilient, focus on strategic decisions and increase innovativeness.

REG launches business profile and smart search

REG UPDATES

REG Launches Business Profile and Smart Search

For years, REG has helped firms across the insurance market stay on top of regulatory compliance, monitor counterparty risk, and automate onboarding through a single, trusted platform. The REG Network is already embedded in many firms’ day-to-day compliance workflows. But as the industry evolves, so do the needs of our users. That’s why we’re expanding REG beyond regulatory data and into deeper insight and discovery.

This month, we’re introducing two major updates: Business Profile and Smart Search. Together, they represent the next step in our mission to make REG a hub not just for compliance, but for connection, visibility, and growth.

Until now, REG’s strength has been its ability to simplify and automate regulatory checks. Whether you’re assessing a counterparty’s FCA permissions, reviewing control changes, or managing fair value assessments at scale, our platform gives you the confidence to make informed decisions — fast. But we know that this is only part of the picture.

Making smart decisions about who to work with isn’t just about compliance — it’s about having visibility into a firm’s wider business, people, and proposition. What do they specialise in? Who are their key contacts? Where do they operate? What products do they offer?

With Business Profile, we’re bringing this information together in one place — combining rich company insight with the regulatory data you already rely on.

You’ll now see a dedicated space on each firm’s profile for business-level detail, including company overviews, product lines, operational reach, and key people. It’s a more complete view of your existing connections — and the ones you might want to work with next.

This helps users quickly understand not just whether a firm is compliant, but who they are as a business. Whether you’re researching a prospective partner, comparing suppliers, or refreshing your view of an existing relationship, Business Profile provides the kind of contextual insight that helps reduce ambiguity and build trust early on.

It’s also a chance to tell your own story. When your firm completes its Business Profile, it becomes visible to the wider REG Network — making it easier for potential partners to find, assess, and engage with you. In an increasingly competitive market, having a clear, up-to-date profile helps you stand out.

Alongside Business Profile, we’re also launching Smart Search — a faster, more intelligent way to discover firms on REG. With Smart Search, you can now filter firms by a much wider set of criteria: from business activities and specialisms to regulatory status, location, and more.

This is particularly useful for teams looking to assess the market at speed. Need to find an MGA with property expertise in the Midlands? A broker with international reach and strong credit status? Smart Search makes it possible in just a few clicks. And the more information a firm includes in its Business Profile, the more visible and discoverable it becomes in these results.

This is more than a directory. It’s a living, breathing marketplace of regulated firms — and a smarter way to navigate it. These updates mark a step-change in how REG supports the market. By combining compliance data with business intelligence, REG is evolving into a platform that not only reduces risk, but actively enables growth.

For users, this means less time spent chasing background information and more time focusing on building strong, strategic partnerships. It means the ability to discover relevant firms faster, onboard with greater confidence, and showcase your own strengths to a wider audience.

It’s also completely free to use. All REG users can complete their Business Profile and start benefiting from increased visibility right away.

Simply log in to your REG account and you’ll see the new Business Profile section available to complete. Adding your information is quick and straightforward — and your profile will instantly become visible to others on the platform.

Smart Search will be available from your REG homepage, giving you access to a powerful new search experience designed to support your commercial and compliance workflows.

These tools are built to work hand-in-hand — and we’re confident they’ll unlock new value across your day-to-day.

This launch is part of a wider roadmap to make REG the go-to platform for relationship management in regulated industries. We’ll continue to invest in features that support that vision — helping our users build trust more quickly, and stay ahead of market demands.

With Business Profile and Smart Search, REG is taking a meaningful step toward that future. Your Profile. Your Network. Your Opportunity to Grow — with REGKeep an eye on your inbox for when the features go live — and be ready to take your place in a smarter, more connected Network.

Borrowing Raises Pressure UK

FINANCE

Borrowing Raises Pressure Ahead of Autumn Budget

UK public sector borrowing reached £20.7bn in June which was significantly higher than expected as rising debt interest costs and slow economic growth put pressure on the government’s fiscal plans. 

The figure was £6.6bn more than the same month last year and well above the £17.1bn forecast by the Office for Budget Responsibility (OBR). It marks the second-highest June borrowing figure since records began in 1993, exceeded only by 2020 during the peak of pandemic support measures. 

The unexpected rise is largely due to soaring government debt interest payments, which hit £16.4bn – the second-largest monthly amount since 1997. These payments are being driven up by inflation linked gilt obligations, which are tied to retail price indices. 

The figures have intensified speculation that tax increases could take place in the Autumn Budget, as the Chancellor looks to maintain Labour’s fiscal rule: to fund day-to-day spending through revenues by 2029/30. Estimates suggest that what was once a £9.9bn buffer may now have turned into a £13bn shortfall. 

There is increasing pressure with Labour MPs to explore tax rises on wealth and capital gains, potentially to fund cuts for lower earning households. Meanwhile, opposition figures have described the borrowing levels as “shocking”, urging immediate spending restraint to avoid additional tax burdens. 

These developments will likely shape the direction of fiscal policy as the government prepares its next major financial statement. 

FSCS's ongoing efforts to reduce spending

REGULATORY

FSCS Pays Out £722,000 in Claims Against General Insurance Brokers

In the financial year ending 31 March 2025, the Financial Services Compensation Scheme (FSCS) paid out £722,000 in claims against the general insurance distribution class, which includes brokers.

This represents an increase from the £629,000 paid out the previous year. The rise in payouts was driven by legacy issues, as there were no new firm failures during the period. 

A total of 171 claims were processed, with the average payout at £4,223. As in previous years, most claims were related to Payment Protection Insurance (PPI). For the second consecutive year, brokers were not levied, with the cost being met from accumulated surpluses.Brokers can also expect no levy in the upcoming 2025/26 financial year. 

For insurers, the total FSCS payout through the general insurance provision class reached £134 million in 2024/25, a decrease of £26 million compared to the previous year. Payments were again linked to historic firm failures, such as Chester Street Holdings, which collapsed in 2001 and led to a £45 million payout.

The FSCS also noted a reduction in payments related to the 2021 collapse of MCE Insurance, which resulted in a £20 million bill, significantly lower than the £33 million and £52 million payouts in the previous two years. 

In total, 27 insurance firms received compensation payments in 2024/25. Martyn Beauchamp, CEO of FSCS, highlighted the importance of their role in “building trust and confidence in financial services” and praised their success in securing more than £56 million in recoveries for the year. This recovery will help offset future levy costs for firms. 

These figures highlight the continuing financial impact of past firm failures and the FSCS’s ongoing efforts to support both consumers and businesses within the insurance industry. 

UK cyber Insurance market growth

CYBER

Insurance on Edge: Rising Threats Reshape the Market

The UK cyber insurance market has seen exceptional growth in 2025, with a compound annual growth rate of around 16% over the past five years. This expansion is being driven by an increasingly diverse threat landscape, growing digital interconnectivity, and rising demand for protection against ransomware, data breaches, and business interruption losses.

According to a recent report from Morningstar DBRS, the surge in cover is being supported by both increased awareness and high-profile cyber incidents, including significant breaches in the retail and infrastructure sectors. Notably, some UK firms suffered insured losses of between £270 million and £440 million following attacks in late 2024 and early 2025, illustrating the severity of modern cyber exposures.

Claims data reveals that in 2024, 24% of cyber claim notifications were tied to network interruptions, while 20% involved data breaches, 18% were due to ransomware, and 13% resulted from direct system infiltration.

The remainder included phishing attacks and electronic crime. As a result, UK insurers are widening the scope of cyber policies, with business interruption and first-party loss cover now regarded as standard. Many insurers have also raised entry requirements, demanding more robust security controls, multi-factor authentication, and incident response plans before underwriting policies.

Despite increasing losses, market competition remains strong. In the first quarter of 2025, primary cyber insurance premiums in the UK fell by an average of 7%, largely due to abundant underwriting capacity. However, experts have cautioned that lower pricing could encourage more aggressive attacks, while insurers continue to face challenges in modelling complex cyber risk, particularly with limited long-term claims data and evolving systemic threats.

Artificial intelligence and automation are playing a larger role in how cyber risk is evaluated and priced. As of mid-2025, 85% of UK cyber insurers are using AI for real-time risk scoring, with predictive analytics influencing 76% of renewals.

Automation has also reduced manual processing times by up to 65%. Looking ahead, insurers are being urged to strengthen vendor oversight, adopt dynamic modelling, and embed resilience services to manage increasing volatility in a fast-evolving cyber threat landscape.

 
The role of ESG in shaping UK insurance market

ESG

Sustainability Secured: How ESG Is Shaping UK Insurance

Environmental, Social, and Governance  considerations have solidified their place as integral components of the UK insurance industry. In response to increasing regulatory demands and shifting consumer expectations, the sector is making notable strides towards integrating sustainability practices into both business operations and product offerings. This movement is being driven not only by the need to comply with government mandates but also by the growing recognition that sustainable business practices provide long-term value and competitive advantage.

The UK government has continued to lead the way in the integration of climate-related financial disclosures. With the expanded implementation of the Task Force on Climate-related Financial Disclosures recommendations, insurers are now required to provide detailed insights into how climate change might affect their financial performance. By 2025, this regulatory shift has been extended to encompass mid-sized firms as well, ensuring that smaller players in the insurance industry are also held accountable for their climate-related risks.

Further, the Financial Conduct Authority has introduced stricter guidelines on ESG data transparency, urging insurers to disclose more robust information on their environmental impact, social governance, and ethical investment strategies. These guidelines are aimed at improving the overall integrity and consistency of ESG reporting across the sector, helping investors and consumers make more informed decisions.

Alongside regulatory pressure, consumer demand for sustainable products has seen a remarkable rise. Today’s insurance customers are no longer solely focused on price and coverage; they are increasingly concerned with how their insurers address environmental impact, social responsibility, and corporate governance. 

A 2025 survey revealed that 72% of UK consumers would choose an insurance provider with strong ESG credentials over one that offered cheaper premiums or more extensive coverage.

To cater to this demand, insurance companies are expanding their portfolios with a variety of green and socially responsible policies. Examples include policies that incentivise clients to adopt electric vehicles, policies that cover renewable energy installations, and investments in sustainable infrastructure projects. These products are not just attractive to eco-conscious consumers but are also in line with the growing trend of impact investing that prioritises long-term sustainability.

As the UK insurance sector progresses in its ESG journey, the focus will increasingly shift towards long-term sustainability goals. The next few years will likely see more insurers integrating ESG considerations into their underwriting and pricing models, with the goal of mitigating risks posed by climate change, societal shifts, and governance issues.

Insurers that can innovate and stay ahead of regulatory changes will not only enhance their reputation but also attract investors and customers who prioritise responsible and sustainable practices. The future of insurance is undoubtedly green, and those who adapt will be poised to lead in the next era of the industry.

Freeholders Face Legal Action Over Secret Insurance Commissions​​

REGULATORY

Freeholders Face Legal Action Over Secret Commissions​

A major legal case is being brought against four of the UK’s largest freeholders: E&J Estates, Consensus Business Group, Long Harbour, and Ground Rents Income Fund – over a national scandal involving secret commissions on buildings insurance given to property managing agents.

Legal proceedings have also been launched to compel Artex, an insurance risk advisory firm, to reveal the identities of its landlord clients

Artex is said to have guided landlords in establishing offshore insurers to hide commission earnings from leaseholders.

Leaseholder Action is spearheading a group legal claim for impacted leaseholders, with solicitor Liam Spender of Velitor leading the case. The team has served legal warning letters and secured significant funding to proceed under a no win, no fee arrangement as reported by Insurance Times.

Liam also said: “We started with those [four] for a variety of reasons – the number of claimants and to get the best spread across the country. But we think there might actually be 20 different landlord groups we could potentially go after.”

The legal letters stated that landlords are obligated to avoid making a profit from service charges and must not pass on insurance costs to leaseholders that exceed fair market value.

In multi-occupancy buildings, it’s typically the freeholders or their managing agents who arrange insurance through brokers. Meanwhile, leaseholders have no say in the insurer selected, even though they ultimately pay for the policy through service charges imposed by the freeholders.

Freeholders used inflated insurance premiums to gain secret commissions of up to 60%, leading to the 2024 leasehold reform law, which still awaits full implementation as a government consultation on stronger leaseholder rights continues.

A report published by the FCA back in 2023 found that some insurance commission rates could reach over 62%. Moreover, insurance broker commissions increased by 45% from between 2019 and 2022.

With the introduction of Consumer Duty and Fair Value laws in 2024, now insurers and brokers must be fully transparent on the commission amounts freeholders are paid.

MGAA annual conference 2025

REG UPDATES

REG at the MGAA Annual Conference 2025

The MGAA Annual Conference is always a standout moment in the calendar for the Managing General Agent community — and this year was no exception. With the theme “Navigating a Bright Future”, the 2025 event brought together hundreds of professionals from across the market, each committed to driving progress, sharing ideas, and shaping the future of delegated authority.

As proud Silver Sponsors of the MGAA, REG was delighted to play an active role in this year’s Annual Conference — a flagship event in the MGA calendar that brings together professionals from every corner of the delegated authority space. Our sponsorship reflects a deeper commitment to supporting the MGA community, not just on the day, but year-round — through meaningful partnerships, insight-sharing, and solutions that enable firms to navigate regulatory challenges with confidence.

Being a sponsor isn’t just about presence — it’s about participation. From engaging conversations and networking opportunities to showcasing our latest developments, the conference gave us the chance to connect directly with the people and businesses shaping the future of the market. And with so many decision-makers, rising talent, and compliance professionals in one place, it was the ideal setting to listen, learn, and share what REG is building to support smarter, more connected trading relationships.

Throughout the day, the REG team welcomed a steady stream of conversations with brokers, MGAs, capacity providers, and compliance professionals from across the market. Many were curious to learn more about how REG is tackling some of the sector’s biggest challenges — from streamlining counterparty risk management to improving operational efficiency and navigating complex regulatory demands. Others were drawn in by a shared interest in innovation, keen to explore how technology is evolving to meet the needs of a fast-changing industry. It was a great opportunity to exchange ideas, hear fresh perspectives, and showcase a glimpse of what’s coming next at REG.

One of the most rewarding parts of the day was hearing real stories from the market. Conversations naturally turned to the challenges firms are facing right now — from growing regulatory complexity to capacity pressures and the need for better data visibility. These informal chats helped reinforce why our mission at REG matters: to remove friction from insurance workflows and make compliance smoother for everyone.

We also had some lively discussions around the importance of connection — not just in terms of technology and data, but in the human sense too. Many delegates reflected on how the MGAA community has given them invaluable opportunities to grow their networks, find mentors, and collaborate in new ways. That sentiment came to life during the panel sessions, particularly the one hosted by our very own Zoë Parsons, REG’s Head of Marketing.

Zoë chaired the Next Gen panel, “Networking Your Way to Success,” where emerging professionals shared experiences on building relationships that count. It was an inspiring and refreshingly honest discussion, filled with practical tips for making meaningful connections in what can sometimes feel like a very traditional industry. The panel captured exactly what the MGAA community does best — bringing people together to share, learn, and lift one another up.

For REG, the MGAA Annual Conference is more than just a date in the diary. It’s a reflection of our ongoing commitment to the market we serve — and a reminder of the value in showing up, listening, and contributing.

We left the conference energised, grateful, and even more excited about what we’re building for the MGA market. Thank you to the MGAA for another fantastic event — and to everyone who stopped by to chat with us. We’ll see you again soon.

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