REG Reviews
2nd December 2024
Last month, the FCA reviewed life insurers’ bereavement claims processes, brokers were advised to revisit policies ahead of Employment Rights Bill enforcement, ISO introduced new global ESG guidelines to accelerate adoption of sustainable business practices and O2’s AI “granny” rollout is shaking up scamming attempts.
Read these articles and many more as we bring you all the important news and views in the insurance and financial services world…
The FCA has recently completed a multi-firm review based on data requested from 15 life insurers, constituting more than 75% of the life protection market, in order to learn more about life insurers’ bereavement claim processes.
As part of the review, the regulator asked companies to describe the customer journey of each life product within four main categories:
The multi-firm review discovered general evidence of good practice. For example, some of the firms were proving to respect Consumer Duty law and providing extra support to vulnerable claimants during difficult times.
However, the FCA admits that it can be difficult for some life insurers to provide adequate service on time due to delays in obtaining the necessary evidence to assess a claim.
According to Matt Brewis, Director of Insurance at the FCA; “The loss of a loved one can be intensely stressful and we expect firms to offer the right support to help their customers during this difficult time”
He also added; “’We expect all life insurers to act on our findings and avoid unnecessary delays with claims”.
According to the watchdog, life insurance firms took on average :
The regulator found significant inconsistencies in how insurers handle bereavement claims.
While some firms could provide clear data on service standards and improvements, many struggled to supply the requested information. Few insurers tracked customer journey times by product type, making it hard to assess the true cost and value of individual products.
So what comes next?
The review of bereavement claims revealed ongoing issues with poor and slow service, emphasising the need for firms to do better.
The FCA also warned against putting product process times together and called insurers to “consider their conduct in light of additional requirements” under Consumer Duty.
To remedy this, the watchdog will engage with firms to address compliance gaps, enforce expectations, and monitor improvements, particularly in reducing claim journey times.
Future work will assess progress and how firms meet Consumer Duty’s higher standards, as outlined in the recent Multi-firm Review.
Senior management is urged to review service levels holistically, align with the requirements and ensure good outcomes for customers.
In a move to combat phone scammers, O2 has introduced an artificial intelligence tool named “Daisy”, designed to keep fraudsters on the line and reduce their ability to target real victims.
“Daisy”, which mimics the voice of a friendly elderly woman, engages scammers in lengthy and unproductive exchanges, diverting their focus and resources.
Part of Virgin Media O2’s wider ‘Swerve the Scammers’ campaign, the tool demonstrates the power of technology in protecting vulnerable individuals from financial crime.
Reports indicate “Daisy” has successfully held scammers’ attention for extended periods, in some cases over 40 minutes, with misleading stories and false information.
Jon Davies, spokesperson for Virgin Media O2, highlighted the importance of the initiative, stating; “We are committed to safeguarding the public from the growing menace of scam calls. Daisy is just one example of how innovation can be a critical weapon in this fight.”
The campaign also seeks to educate the public on recognising and avoiding scams. People are encouraged to report suspicious calls and texts by forwarding them to 7726, a free service that helps identify and block fraudulent numbers.
O2’s approach not only disrupts scammers but also serves as a powerful reminder of the importance of staying vigilant.
Fraudsters often target those they perceive as vulnerable, making tools like “Daisy” a critical part of broader anti-fraud efforts.
This move highlights the growing role of AI in security and fraud prevention, showcasing how simple yet effective solutions can make a significant impact in the fight against financial crime.
The Employment Rights Bill, which features 28 reforms to the current employment standards, was introduced to parliament on 10th October this year and is going to be a game changer in how fairly employees are treated.
Once the bill passes, it’ll become the largest reform in employment rights for a long time, and is aimed at eliminating all kinds of poor work conditions or contracts: From offering contracts with guaranteed hours to demanding employers to justify the refusal of flexible working requests.
What does this mean for the insurance industry? Brokers and underwriters will have to equip themselves to ensure their commercial clients are adhering to ethical employment practices in the wake of this new regulatory upgrade.
According to Raymond Silverstein, Partner and Head of the Employment Practice at Browne Jacobso, this new legislation is a “really big deal”, with tangible changes coming into force from 2026.
While this bill is truly revolutionary for employment rights, it does come with its ups and downs. Silverstein believes that five main parts of it could be problematic for employers and could potentially affect their purchased employment practices liability.
Some of these sections are:
Silverstein adds that the suggested new protection from any kind of third-party harassment rather than just the current laws that protect only from sexual harassment will have a huge impact on the industry.
Importantly, the government estimated the changes could cost employers £5 billion annually and increase tribunal cases by 15%. Also, unfair dismissal awards can reach £115,115, Silverstein noted, calling them “substantial claims.”
Taking preventive action could minimise the risk of employment liability or D&O claims and other long-lasting damages the new bill could have on employers.
For instance, Silverstein emphasises on the importance of improving how probationary periods are handled and urges brokers to educate themselves better on the matter to avoid unnecessary risks on clients and therefore keeping claims to a minimum.
As reported by Insurance Times, Owen Dacey, a legal expert at Rising Edge urged brokers to update employment practices liability policies ahead of changes in the Employment Rights Bill.
These policies cover claims like discrimination and wrongful termination. As a result, he expects more disputes, higher claim costs, and broader allegations under the new rules.
Dacey suggests updating policies to cover investigation costs, broaden definitions of employees and workplaces, and ensure both the company and individuals (like directors) are protected from claims.
Policies should also clarify if fines, awards, and compensation are included, and cover third-party discrimination claims.
2026 is just around the corner and the pressure on brokers and underwriters to be proactive about the bill is immense. How long could it take the insurance industry to catch up?
The Financial Conduct Authority (FCA) has announced a new set of measures designed to maintain the UK’s leading position in the bond, derivatives, and asset management sectors, supporting growth and enhancing market transparency.
Under these new proposals, investors in bond and derivatives markets will gain greater access to data, aiming to make these markets more efficient and reduce costs for firms.
Jon Relleen, FCA’s Director of Supervision, Policy, and Competition, stated; “We want UK markets to be efficient and to support economic growth. Putting more information in the hands of investors and giving investment firms greater access to research to inform their strategies will bolster UK markets.”
Key highlights of the FCA’s measures include:
In addition, the FCA is building on its July 2024 rules, which provided institutional investors with more flexible options for paying for investment research.
The regulator now proposes extending this flexibility to asset managers of pooled investment funds, allowing combined payments for research and trade execution with specific safeguards.
The new transparency rules for bonds and derivatives will take effect on 1st December 2025, marking a significant step in modernising the UK’s financial landscape and boosting its global market position.
The UK government has launched an innovative platform aimed at enhancing artificial intelligence (AI) safety across businesses.
This initiative is led by Science and Tech Secretary Peter Kyle, who envisions the UK as a global frontrunner in the evaluation and assurance of emerging technologies.
Unveiled in November, this platform is a one-stop shop offering guidelines and tools for businesses to conduct thorough assessments and checks on new AI technologies. This includes examining data sets used by machine learning algorithms to ensure they are free from biases.
Peter Kyle highlighted the platform’s dual purpose during his upcoming speech at the Financial Times’ Future of AI Summit. He described it as a resource that not only supports responsible AI utilisation by businesses but also cements the UK’s status as a leader in AI expertise.
Building on the foundations set by the UK’s AI Safety Institute, initiated under former Prime Minister Rishi Sunak, the government is now focusing on assurance technologies.
These are vital for businesses to confidently assess and rely on AI products, with companies such as Holistic AI, Enzai, and Advai leading the way.
Despite the UK market for AI assurance potentially growing to £6.5 billion by 2035, there is competition from global counterparts like the USA and the EU, both of which are advancing their own AI safety initiatives.
The new platform also features a self-assessment tool designed specifically for small businesses to help them ensure their AI systems are safe.
Additionally, the UK is expanding its international outreach with a new AI safety partnership with Singapore, which will enhance research and development of global AI standards.
Dominic Hallas, Executive Director of The Startup Coalition, noted; “There definitely is a huge opportunity in the UK market for AI assurance technologies. The biggest gap to adoption of AI at the moment is trust in the models.”
He also highlighted the challenges facing AI startups, including “how to access enough compute power and how to attract talent,” areas where he believes government intervention and investment are crucial.
This strategic development not only aims to elevate the UK’s leadership in the global AI scene but also strengthens the trust and dependability of AI applications in business operations.
According to a recent EY report, UK insurers’ premium income growth is projected to slow down in 2024, 2025 and 2026 despite a brief surge due to inflation and post COVID-19 economic conditions.
This is mostly due to a ‘return to normal’ when it comes to consumers’ premium prices as the market is set to stabilise.
EY predicts a growth of 7.9% in 2024, which is a betterment since its last forecast of 7% and still below the 8.8% increase back in 2023. Moreover, specialists predict a further decrease to a potential 4.5% by 2026.
EY also projected that demand for home and motor insurance policies will stay strong due to an increase in household income deriving from a fall in interest rates and a rise in consumer confidence.
However, home and motor premium income is believed to slow over the upcoming years.
According to Martina Neary, UK insurance leader at EY; “The macroeconomic environment has been very challenging in recent years, and insurance premiums increased sharply to balance cost and inflationary pressures in 2023 and much of 2024.”
She also adds; “With inflation and interest rates now falling, we appear to be turning a corner, and we expect the rate of premium increases to ease if cost pressures continue to lower – bringing premium income growth to more ‘normal’ levels over the coming years.”
Martina warns that despite promising signs of economic recovery that lifts the spirits for both customers and firms, ongoing geopolitical upheavals and unforeseeable weather conditions pose risks to the predicted growth.
Finally, life insurance premiums are on the other end of the spectrum and are expected to grow to 6.2% this year as noted by EY’s analysis. However, experts predict a quick decline to 4% and 2.6% in 2025 and 2026 respectively.
On 19th November, Lloyd’s hosted its inspiring Careers Insight Day, an event aimed at showcasing the diverse opportunities available within the insurance sector, with a particular focus on non-traditional roles. Organised by the Inclusion at Lloyd’s Partner Networks – Gender Inclusion Network, iDAWN, and The Insurance Families Network – the day was designed to break stereotypes about the industry and inspire the next generation of talent to consider insurance as a career.
Among the speakers was REG’s Marketing Manager, Zoë Parsons, who shared her journey into the industry, highlighting her role in marketing within the insurance space. Reflecting on her career path, Zoë gave attendees a glimpse into her typical day and offered advice to both students and career returners.
Key Takeaways from Zoë:
✨ Turn setbacks into opportunities: Challenges are stepping stones for growth.
✨ Imposter syndrome can be your superpower: Use it as motivation to succeed.
✨ No idea is a bad idea: Innovation begins with thinking differently.
Zoë was joined by professionals from Zurich Insurance, WTW, and RPC, who provided insights into roles spanning legal, finance, and operations. Together, they painted a vivid picture of the dynamic and rewarding careers available in the insurance world.
“The energy in the room was incredible,” Zoë shared; “Seeing students and career returners engage with so much enthusiasm reminded me why it’s so important to continue championing our sector. Insurance is a space full of opportunities, and events like this show that it’s not just a career choice—it’s a career with purpose.”
The event underscored the industry’s commitment to fostering inclusion, diversity, and innovation. It’s a call to action for everyone in the sector to make insurance a choice, not a chance. As Zoë so aptly put it; “Let’s keep making it happen!”
With initiatives like this, the future of insurance looks brighter than ever, as the sector continues to attract fresh talent and redefine what it means to work in one of the world’s most essential industries.
At REG, we’re proud to be part of the movement redefining what it means to work in insurance. Attracting fresh talent isn’t just about words—it’s about action. Through events like Lloyd’s Careers Insight Day and our own initiatives, we’re creating tangible opportunities and platforms that inspire the next generation, support inclusion, and drive innovation across the sector.
By nurturing exceptional talent and showcasing the purpose and potential of a career in insurance, we’re helping to shape a future where the next generation chooses this industry, not by chance, but because of its undeniable opportunities.
“Attracting fresh talent into the insurance industry is absolutely vital for its future. It’s not just about filling roles and growing the talent pool, but showing the next generation that this is a sector full of exciting opportunities, diverse paths, and real purpose. With reports showing that 50% of the insurance workforce could retire by 2030, the need to attract and retain new talent has never been greater.
By breaking outdated stereotypes and spotlighting the dynamic, rewarding careers on offer, we can change perceptions and inspire people to actively choose insurance as their career path. The industry thrives on innovation and fresh thinking, and that comes from attracting individuals with new ideas, perspectives, and skills. In fact, studies indicate that companies prioritising diversity and inclusion are 21% more likely to outperform their peers, making it clear that fresh talent is a business imperative for success.
By investing in initiatives that connect with students, career returners, and professionals looking for something meaningful, we can ensure the future of insurance is one driven by creativity, inclusion, and opportunity. We always talk about the need to attract fresh talent into the insurance industry, so I am grateful to have been given the opportunity to put that thought into action and contributing to making insurance a choice people are excited to make.”
The UK government has recently proposed important changed to data protection law in order to liberalise data accessibility for both public and private businesses which could potentially help improve the economy, according to Nutan Rajguru, Head of Analytics, Claims and Underwriting at Verisk.
Among the other suggested reforms to data protection law are the rules related to the use of AI technology in decision making processes and the leveraging of data for scientific research purposes.
This new data bill is called the Data (use and access) Bill (DUA) and is aimed at boosting the UK economy by £10 Billion by simplifying the access and use of data for some public services like the police and NHS.
This new legislation replaces the non-passed Data Protection and Digital Information (DPDI) Bill, removing the need for officers to justify in writing when accessing personal data.
While it could save 1.5 million police hours and £42.8m annually, it still raises concerns about potential increased data access for government authorities and major technology companies and its impact on the insurance sector.
According to Matthew Geyman, Managing Director at Intersys; “sensible changes related to automated decision making and so presents a lower probability of threatening the European Union’s (EU) adequacy decision relating to the UK’s data protection legislative framework.”
He also added that; “This can only be good news for UK businesses and the insurance sector, given the vast corpus of information available to it and the increasing importance of cross border data transfers.”
By creating a standardized approach to digital identity verification, the Bill offers a secure solution that could support the insurance industry as a whole.
Nutan Rajguru recognises that; “Overall, there are many positives for insurers. For example, it’s welcome news that the government is introducing a standard around digital verification services. This could help insurers in the fight against fraud.”
According to Vannessa Young, who manages compliance, sustainability and advisory boards at BIBA, this bill introduces modifications to Data Subject Access requests, reducing the requirement to “reasonable and proportionate efforts” for data identification.
She also adds that it’s all about balance and making sure that privacy rights aren’t violated, which will be tracked accordingly at the parliament.
The future only will tell how beneficial this new data regulation update will be to the insurance market.
The International Organization for Standardization (ISO) released new ESG Implementation Principles at COP 29 to guide firms around the globe streamline their ESG efforts.
The goal of these new guidelines is to improve reporting consistency, making sure communication of sustainable efforts is clear globally.
The ESG Implementation principles have been constructed with the involvement of more than 1900 experts spanning 128 countries in order to be in line with the17 UN Sustainable Development Goals.
Importantly, the role of the principles is to simplify the process of ESG reporting giving the complex nature of this field, particularly regulations and laws that have amplified.
In fact, global ESG regulations have grown by 155% over the past ten years, making it difficult for companies to maintain consistent reporting across various regions, industries, and business sizes.
Some of these laws are:
According to Sergio Mujica, Secretary-General of ISO; “ISO’s ESG implementation principles will foster a lasting culture of ESG that will bring real value to organisations, governments, investors, and consumers.
These guidelines will help accelerate the adoption of sustainable business practices, which benefits diverse communities and the environment.”
Additionally, This framework aims to help organisations integrate ESG into their culture with clear guidance on sustainability practices. It supports holistic growth by addressing environmental, social, and governance issues, promoting balanced growth and driving progress toward a sustainable future.
As summarised by the ISO, these new ESG Implementation Principles aim to:
So how will the insurance industry respond to these principles? It’s important that the market reviews these principles carefully and makes sure ESG becomes part of their organisation’s default culture, providing in depth training to employees and ensuring everyone in the company is aligned and adheres to ESG practices.
In a move aimed at streamlining financial regulation, the UK government has announced plans to revamp the system for managing financial service complaints.
This initiative is part of a broader effort to reduce the regulatory load on the City of London and boost economic growth.
The reforms, spearheaded by the Financial Ombudsman Service (FOS) and the Financial Conduct Authority (FCA), were introduced shortly after Chancellor Rachel Reeves’s call for improvement in handling market practices and large-scale redress events.
The announcement came during her speech at the annual Mansion House dinner, where she emphasised the need to ease regulations believed to be obstructing growth since the 2008 financial crisis.
The proposed changes include giving financial firms more time to address customer complaints and limiting the possibilities for appeals against ombudsman decisions.
These suggestions are open for industry feedback, with formal proposals expected in the upcoming year.
This comes at a time of increased scrutiny over the handling of mis-sold car finance complaints, which has significantly impacted the supply chain for car loans and piled additional pressure on the FOS.
The recent surge in complaints, primarily driven by claims management companies, has prompted the FOS to introduce fees for bulk cases handled by such entities, aiming to manage the overwhelming volume and improve the system’s efficiency.
Industry leaders have welcomed the planned changes, highlighting the potential to simplify the complex regulatory framework and reduce costs.
The FCA is considering increasing its intervention powers, though it seeks to balance these with the FOS’s need to maintain independence and effectively manage cases.
Chancellor Reeves has also urged both the FCA and the Bank of England (BoE) to align their efforts more closely with economic growth and competitiveness goals, advocating for reduced administrative burdens while maintaining high regulatory standards.
The changes are part of the UK’s broader strategy to ensure its financial markets remain competitive, with further measures proposed to modernise capital markets and increase public participation in equity markets.
Recent Howden research has discovered that approximately 52% of UK firms have experienced a cyberattack over the last year.
Moreover, this same study reported that cyberattacks have cost British businesses £44 Billion in the last five years.
While large firms with an annual revenue exceeding £100 million have shown to be the most targeted group, SMEs with revenues ranging from £2 million to £50 million are not off the hook.
What’s even more concerning is that many businesses don’t have cyber insurance despite the serious nature of these risks, according to BIBA Chief Executive, Graeme Trudgill.
Trudgill stated that; “This protection gap is even more worrying given the significant and pervasive cyber risk. Working together, we believe that we can make strong inroads in closing the gap and bring more businesses on board and build cyber resilience across the country.”
When it comes to the common causes of cyberattacks, compromised emails come first with 20%, followed by data theft with 18% according to Howden. Some other attack contributors are fraud funds transferred, insider threat and ransomware.
Howden revealed that many UK businesses lack basic cybersecurity measures and face a knowledge gap in this area.
While 61% use antivirus software and 55% deploy network firewalls, many cite cost (26%), insufficient knowledge (26%), and limited IT resources (22%) as barriers to improvement.
Implementing stronger cybersecurity measures could reduce cyber-attack costs by up to 75%, potentially saving UK companies £30bn between 2019 and 2024. For an average UK business, this could mean savings of approximately £3.5m over a decade.
The only way to prevent disastrous cyberattacks from happening is to work together through partnerships and programmes.
Howden stressed the importance of joint efforts between insurers and the government to tackle growing cyber risks. It proposed tax relief on cyber investments (33%) and free resources (32%) as key ways to improve resilience, alongside mandatory standards (31%).
With generative AI becoming more prominent and potentially increasing the risks of cyberattacks, Experts at Broker Expo 2024 urged specialist insurers to offer brokers training and expertise in cyber cover in order to mitigate future risks.
Moving forward, the only way to help prevent and mitigate revenue risks associated with cyberattacks is to invest in a solid cyber insurance policy which can support companies to re-establish cyber resilience within their operations.
Last month, experts dispute FCA concerns over brokers’ compliance with fair value, whilst the regulator tightens focus on premium financing firms, banks are warning customers about “quishing” scams, scientists achieved a breakthrough in DNA data storage, the FCA reveals ongoing issues of workplace misconduct in the London insurance market, emphasising the need for cultural change...
Last month, the FCA released its Product Oversight and Governance review and increased scrutiny of Principal Firms' oversight on ARs, REG partnered with Insurance Post to debate whether RegTech is a luxury or a necessity for tackling regulatory challenges, Insurance Business TV featured industry leaders discussing DEI and talent issues in the insurance sector, and rising concerns over deepfake and document fraud continue to affect the industry...
Last month, the FCA published a discussion paper aimed at bettering the commercial regulatory landscape, the average UK home insurance has skyrocketed, the increase in severe weather damages is compelling insurers to think of stronger strategies, and REG's new module REG Verified is set to revolutionise the insurance market...
Last month, the FCA urged financial firms to improve their treatment of politically exposed persons (PEPs), a major IT outage led to a potential rise in claims, the UK motor insurance sector faced major underwriting losses due to the current economic and political climate, and the insurance industry is supporting $19 trillion in net zero investments by engaging in greener projects...
Last month, the growing threat of summer floods was highlighted, urging both policyholders and insurers to take proactive steps. The FCA's Market Watch 79 emphasised the importance of strong data management in surveillance against market abuse, firms were reminded that the Consumer Duty is not a 'one time requirement', but a continuous effort, and REG is excited to sponsor the upcoming MGAA Annual Conference and collaborate with MGAs about the value of partnerships…
Last month, the Consumer Duty Alliance launched a clarifying guide to assist firms preparing their annual board reports, premium finance requests soared amid cost-of-living pressures, the FCA set out measures to combat domestic financial abuse and REG achieved its ISO 27001 certification...
Last month, the FCA urged motor finance firms to allocate sufficient resources, financial institutions expedited technology adoption to tackle regulatory hurdles, underinsurance presented a pivotal challenge for brokers, and insurers came under the spotlight concerning environmental and social responsibilities...
Last month, the FCA urged financial advisors to review retirement income advice processes, whilst raising concerns within the motor sector regarding fair value, Lloyd's predicted generative AI to increase cyber threat risks, the UK Parliament released its much anticipated 'Sexism in the City' report, and REG launched its new Partnerships Programme...
Last Month, the FCA labelled fair value and pricing as the biggest challenge of Consumer Duty, pension funds drove a surge in UK corporate bond investments, insurers rallied for an investment boost with innovative partnerships and REG published its 2024 research report, exploring the evolving landscape of regulatory compliance and the use of technology...
Last month, The FCA and the UK Government invited feedback on three proposals designed to improve individuals' decision-making regarding investments and pensions, The IMF suggested that almost half of jobs will be impacted by artificial intelligence and the FCA has highlighted the importance of reporting cases of non-financial misconduct, even if individuals have signed non-disclosure agreements. Read these articles and many more, as we bring you all the important news from the insurance and financial services world...
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