REG Reviews
1st December 2025
Last month, UK Government proposed cyber resilience bill, insurers led tech workforce employment, insurers focused on turning climate risk into profit and Reeves’ budget outlines impact on insurance industry.
Read these articles and many more as we bring you all the important news and views in the insurance and financial services world…
The UK government has recently put forward a new Bill in parliament designed to bolster cyber security across the country’s critical public services.
It was in fact, Science, Innovation, and Technology Secretary Rt Hon Liz Kendall MP who introduced the Cyber Security and Resilience Bill in order to strengthen “national security and protect growth by boosting cyber protections for the services that people and businesses rely on every day”.
The aim is to give essential public services, notably healthcare, water supply, transport, and energy, stronger defences against cybercriminals and state-sponsored threats.
According to the government: “In the face of increasing cyber threats, it will prevent disruption – keeping the taps running, the lights on and the UK’s transport services moving – while making sure those who supply our vital services have tougher cyber protections.”
The Bill sets out new security requirements for medium and large IT service providers, compelling them to report significant cyber incidents promptly and maintain solid plans for managing the fallout.
It also gives regulators the authority to identify crucial suppliers to essential services, such as NHS diagnostic partners or chemical suppliers for water networks, and require them to meet baseline cyber-security standards to close off supply-chain weak points.
Stronger penalties will be enforced for severe breaches and more power will be given to the technology secretary to guide regulators and key service operators to take targeted action when a cyber threat poses a risk to national security.
Recent research estimates that major cyber-attacks now cost UK businesses over £190,000 each, totalling about £14.7bn a year. Cyber-insurance payouts have surged too, with the ABI reporting a 230% jump in 2024 to £197m and urging firms to make cyber cover a core part of their risk strategy.
Major companies have already been hit in 2025, including M&S and Jaguar Land Rover. M&S said its breach nearly erased half-year profits despite a £100m insurance payout, while JLR’s attack is reportedly the UK’s priciest cyber breach with losses around £1.9bn.
CEO of the National Cyber Security Center, Dr Richard Horne reported that:
“The real-world impacts of cyber attacks have never been more evident than in recent months, and at the NCSC we continue to work round the clock to empower organisations in the face of rising threats. As a nation, we must act at pace to improve our digital defences and resilience, and the Cyber Security and Resilience Bill represents a crucial step in better protecting our most critical services.”
With almost £200 million in claims last year alone, insurance is clearly key to cyber resilience, providing significant financial backing alongside advice on security and response planning.
By aligning with the new Bill, these measures can support robust risk management and help safeguard the UK’s economic stability.
Technology expertise is proving an important factor when hiring new employees or board appointees in the insurance market compared to more traditional skills according to EY’s data.
In fact, EY’s recent Boardroom Monitor research, which has surveyed 18 UK financial services firms and 89 firms throughout Europe, shows that UK insurers have doubled the number of new hires with technology expertise in last year, surpassing banking and asset management sectors.
The survey found that 67% of new UK insurance board hires had technology expertise in the previous 12 months, which is an increase of 30% compared to the year before, with AI and digital transformation knowledge being amongst the most important subfactors.
In contrast, European counterparts experienced the opposite, with around only 31% of new board members across the entirety of Europe having experience in technology; a 34% decrease from the year before.
EY’s data revealed that technology (67%) is now the second most valuable experience after the C-suite (83%).
Moreover, Forbes has reported that venture capitalists see the general insurance sector as highly vulnerable to AI-driven disruption because it still depends heavily on lengthy manual and legacy processes and bad customer service.
According to Martina Neary, the UK’s insurance leader at EY: “Embracing technological advancement in insurance is complex, accounting for wide-ranging potential risk and set within a demanding regulatory environment.”
She also stresses that: “Technological investment is now essential, and the industry needs to support the development of tech skillsets across levels, implement rigorous risk and safety assessments, and continuously monitor and optimise to ensure maximum value is transferred to customers.”
Women now also make up a strong majority of new tech-skilled insurance board appointments, outpacing both last year’s figures and the wider financial sector.
It’s a clear sign that the UK, compared to the rest of Europe, is setting the benchmark for combining gender diversity with technology leadership and continues to positively disrupt the insurance market through constant innovation.
Ghost broking is an ongoing issues that’s affecting thousands of younger insureds who are an easy target for fraudsters looking to take advantage of young drivers aged between 17 and 25.
To address this issue, Aviva has emphasised the need for stricter enforcement that promotes better education and tougher penalties to put an end to ghost broking amid a 22% increase in cases in the last two years.
Aviva surveyed 2001 drivers between 17 and 25 in October and has found that about 84% of young drivers who purchased a false car insurance policy on social media encountered problems.
The insurer shared that 24% were refused claims, 19% said that their seller vanished and 16% experienced identity theft.
Despite finding that one ghost broker gained approximately £150K from selling fake car insurance, Aviva reports that young drivers generally lose around £2000 whenever they purchase fake car insurance from ghost brokers.
Aviva also reported that 31% of young drivers bought car insurance through social media platforms, which is usually where Gen Z gathers information before buying any product, particularly on Instagram and TikTok.
Moreover, younger individuals are known for following social media influencers and basing their purchases on influencers’ recommendations. However, when should the line be drawn and how many younger drivers will get trapped before the insurance sector takes proactive action to address this?
According to Owen Morris, CEO of UK personal lines at Aviva: “Ghost broking is a fast-growing criminal enterprise that targets young drivers on social media sites. These fraudsters exploit social media to sell worthless insurance, leaving victims thousands of pounds out of pocket, driving without insurance, and at risk of prosecution. They could also potentially be victims of identity or banking frauds in the future.”
Using the tactic of falsely selling affordable car insurance, ghost brokers know how to convince younger drivers by appearing trustworthy and legitimate on both social media and websites. This calls for stronger security measures, scrutiny and educational initiatives from insurers to help spread awareness among younger, inexperienced drivers and prevent them from being used.
As Owen puts it: “Our message to young drivers is simple: Before buying insurance on social media, always check the seller is genuine before you pay.”
Aviva suggests that 67% of social media platforms must only use FCA-verified accounts for insurance advertising. Among the people surveyed, 61% believe that driving tests should include questions on how to buy insurance securely.
With these proactive suggestions in mind, both younger drivers and even more experienced ones will be more alert when it comes to purchasing car insurance and will go for legitimate, FCA-approved insurers, even if it’s through social media.
The Renters’ Rights Act marks one of the most significant changes to England’s private rented sector in a generation. Designed to strengthen protections for tenants while modernising how landlords manage their properties, the Act aims to create a fairer, more transparent rental system.
Although full implementation will be phased in over the coming years, the headline changes are already reshaping expectations across the market.
One of the most notable changes is the end of fixed-term tenancies in favour of open-ended periodic agreements. This shift is intended to give renters greater stability, allowing them to remain in their homes for as long as they wish, provided they meet their contractual obligations. In line with this, the Act removes “no-fault” evictions. Landlords will now need to rely on defined legal grounds to end a tenancy, ensuring clearer processes for both sides.
The Act also introduces limits on rent increases, restricting them to once per year and giving tenants the right to challenge rises they believe are unreasonable. This is expected to reduce volatility for households and encourage more predictable rent-setting practices. Alongside this, “rental bidding”, where tenants are encouraged to offer above-asking prices, will be banned, with landlords required to advertise a set rent.
A further set of reforms focuses on fairness and accessibility. Tenants will gain the right to request pets, while blanket bans on renting to families with children or people receiving benefits will be prohibited. Local authorities are also set to receive stronger enforcement powers, supported by a national landlord database to increase transparency and accountability.
Overall, the Renters’ Rights Act represents a wide-ranging overhaul intended to rebalance the relationship between landlords and tenants. As the new rules come into force, both groups will need to adapt to a system designed around clarity, stability and long-term security.
In November, the Bank of England (BoE) signalled a major push to evolve the UK insurance industry not just to adapt to changing risks, but to help drive economic growth and innovation. In a keynote speech at the annual Insurance Innovators Summit, the BoE’s insurance-supervision lead outlined how regulators intend to give insurers greater freedom to invest, innovate and help build the future economy.
At the heart of the initiative is a new scheme known as the Investment Accelerator. This measure is designed to lower barriers for life and annuity insurers that wish to invest in productive UK assets. Rather than making insurers wait for formal approval, those who meet eligibility criteria may now invest directly. This streamlined process aims to release capital more quickly into sectors such as infrastructure, sustainable energy, and UK based projects that can deliver long term economic value.
By making the matching-adjustment framework more flexible, the BoE hopes insurers will step up and channel resources into domestic investment helping to revive growth at a time when many parts of the economy are under pressure. Early interest from firms suggests the potential for a wave of investment before the end of the year.
The BoE also laid out plans to modernise regulation more broadly. A new captives regime is under development. Captives allow companies to self-insure emerging risks before those risks are taken on by the broader insurance market. By creating a flexible, proportionate captives regime, the UK aims to become more competitive globally, offering corporates a viable home to incubate and manage risk. This could encourage innovation in risk models from climate and cyber risk to novel liabilities and support the development of new products.
Other reforms include enhancements to special purpose vehicles used for insurance-linked investments, shorter approval timelines for cat bonds and easier onboarding for new insurers. The regulator is also updating its own supervisory practices including stress tests and faster authorisation processes to match the evolving market.
Importantly the BoE emphasised that none of this comes at the cost of safety. Insurers will continue to be subject to prudential standards, regulation and oversight to protect policyholders and ensure financial stability.
If successful, these moves could reshape the UK insurance landscape. Insurers may become key investors in the real economy rather than simply risk tailors. The reforms may stimulate investment in infrastructure, green energy and innovative business ventures, while helping the UK maintain or even grow its position as a global insurance hub.
The message from the BoE is clear: regulation should not just preserve stability, but actively enable growth. As the matching-adjustment accelerator takes effect, the next months may mark a turning point. The UK insurance sector may start playing a much more prominent role not just in protecting risks, but in powering growth and innovation across the economy.
As the impacts of climate change become more frequent and severe, the insurance industry is starting to view climate risk not only as a cost but also as a major opportunity. Organisations are increasingly demanding more than traditional insurance: they want help managing and mitigating climate driven hazards before they result in damaging claims.
Many insurers are now shifting strategies. Rather than relying solely on historical data to price risk, they are recognising that rising global temperatures, flooding, severe storms and other climate-related events make past patterns increasingly unreliable. In response, a growing number of firms are developing new types of insurance products and services designed specifically for the climate-challenged world.
One major growth area lies in coverage for the green economy. As businesses and governments invest heavily in renewable energy, electric vehicles, and sustainable infrastructure, insurers have an opportunity to underwrite these emerging assets providing cover for solar farms, wind turbines, EV charging infrastructure and other low carbon technologies. The level of global investment in these sectors suggests that insurance premiums linked to them could form a significant source of revenue for insurers who act early.
Another area of expansion is in risk transfer and resilience services tailored to physical climate risks. For communities and companies exposed to floods, hurricanes, drought or extreme heat, there is growing demand for parametric insurance policies that pay out when pre-defined thresholds (such as rainfall levels or wind speeds) are met rather than the traditional indemnity cover. Meanwhile, insurers are increasingly offering advisory services: risk assessments, resilience planning, adaptation advice and engineering consultancy designed to help clients reduce their exposure to climate hazards before disaster strikes.
Moreover, insurers are becoming an important part of the broader shift towards a net-zero economy. Because they see climate change as a financial risk not only in underwriting but also in investments, many are realigning their portfolios reducing exposure to fossil-fuel-intensive industries and supporting sustainable investments. Through their expertise in risk analysis and loss prevention, insurers can promote more resilient business practices, influencing how assets are built, how land is used and how companies manage long term climate risk.
This transformation is not without challenges. Reliable data remains scarce for many climate hazards, and designing new products requires advanced modelling and scenario analysis. Insurers must also navigate regulatory pressures and evolving climate disclosure requirements. Despite these headwinds, those firms that manage to combine underwriting expertise with climate insights and resilience services are well placed to carve out new, lucrative and socially significant roles in a warming world.
Rachel Reeves’ first Budget outlines a series of fiscal and regulatory measures designed to address public-finance requirements and set priorities for the financial-services sector. For insurers and financial institutions, these measures may shape operating conditions, market behaviour and regulatory engagement over the coming years.
A central proposal is the creation of a Financial Services Growth and Competitiveness Strategy. According to HM Treasury, this strategy is intended to ensure regulators consider economic impact alongside their existing mandates. For insurers, this may influence future supervisory processes, potentially affecting timelines for product approvals, market innovation and the introduction of new risk or investment models.
The Budget also includes changes to tax policy. Dividend-tax and savings-income rates are set to rise, and income-tax thresholds will remain frozen. PwC reported that these measures will alter the tax position for individuals with investment income. The Guardian highlighted that the threshold freeze will bring more earners into higher tax brackets through fiscal drag. These developments may affect how households allocate spending and savings, which could influence uptake of protection, savings and long-term insurance products.
Corporate activity is another area where the Budget may have implications. The Financial Times noted that the Office for Budget Responsibility expects business investment to ease in the coming year. If realised, this could influence demand levels across commercial insurance lines that are sensitive to construction, expansion, and capital-spending trends.
Industry bodies have also responded to elements of the Budget. The Association of British Insurers (ABI) has indicated that updates to salary-sacrifice pension arrangements may have effects on workplace benefits and retirement-saving decisions, which is relevant to insurers providing pension or long-term savings products.
The Government additionally announced plans to explore a UK-based captive-insurance regime. This may affect how multinational organisations structure their risk vehicles and could create opportunities for advisory and reinsurance services, depending on the final regulatory framework.
Broader economic conditions remain a factor. Insurers continue to monitor claims inflation, supply-chain pressures and investment-yield patterns, all of which contribute to operational decision-making in both life and general insurance.
Overall, Reeves’ Budget introduces regulatory, fiscal and structural measures that may influence market behaviour, product demand and strategic planning within the insurance and financial-services sector. The precise outcomes will depend on economic trends and policy implementation over time.
Cyber insurance payouts in the UK have surged to record levels, reflecting how deeply digital threats are now embedded in business risk. In 2024 insurers paid out £197 million in claims more than triple the amount paid the previous year. What is driving this dramatic rise? The growing prevalence of malware and ransomware attacks now accounts for over half of all claims, up sharply from just under a third in 2023.
Businesses across the country are responding by taking out more cyber insurance policies. In 2024, there was a 17 per cent increase in the number of new policies issued, a sign that companies large and small now view cyber coverage as essential.
For many firms, cyber insurance today provides more than a financial safety net. The right policy can offer access to expert support including threat monitoring, incident response planning and advice on rebuilding after an attack. For organisations whose operations depend heavily on digital systems, such support can be the difference between rapid recovery and long-term damage.
Yet the surge in payouts has also brought increased scrutiny. Insurers are now imposing stricter requirements before issuing or renewing cover for instance mandating robust security controls, backup procedures and evidence that businesses can demonstrate recoverability in case of a breach. Firms that neglect basic cyber hygiene or fail to meet these standards risk seeing their insurance claims limited or rejected entirely.
This tightening reflects a broader shift in the insurance industry. As cyber threats grow more frequent and sophisticated, insurers face mounting losses. To continue offering cover, they must offset risk by demanding stronger defences from clients effectively pushing firms to improve security as a condition of protection.
For many businesses the implication is clear: relying on insurance alone is no longer sufficient. Cyber insurance should sit alongside active and ongoing investment in cyber security measures such as multi-factor authentication, regular system updates, staff training, and recovery testing. Only by combining prevention, preparedness and protection can organisations hope to weather the evolving cyber threat landscape.
In short, the recent surge in UK cyber insurance payouts shows how serious the threat to businesses has become. Insurance can provide crucial support when things go wrong, but companies must also be prepared to invest in robust security because in a world where digital attacks are increasingly common, resilience depends as much on prevention as it does on recovery.
The UK unemployment rate has risen to 5% in the three months leading up to September, its highest level in almost a decade outside the pandemic, according to the Office for National Statistics (ONS).
The increase, above economists’ forecast of 4.9%, highlights growing strain in the labour market and has intensified expectations that the Bank of England will cut interest rates next month to stimulate growth. Traders now see a 75% chance of a December rate cut, up from 60%, according to swaps market data.
Wage growth also slowed, with average weekly earnings excluding bonuses easing to 4.6% from 4.8% in the previous quarter. Liz McKeown, ONS director of economic statistics, said the figures “point to a weakening labour market”, noting that the rate was the highest seen since August 2016, excluding pandemic distortions.
Revised tax data showed payroll employment has dropped by 180,000 since last year’s Budget, when Chancellor Rachel Reeves introduced higher taxes on employers. Provisional figures for October suggest a further monthly fall of 32,000.
“There is little comfort in this data for businesses or the government. Employers are being squeezed by sky-high employment costs, and we are beginning to see the consequences,” said Jane Gratton, deputy director of public policy at the British Chambers of Commerce.
Business leaders warn that uncertainty over potential new taxes and tighter labour regulations has prompted many to shelve hiring plans. “Having already faced a significant rise in national insurance costs earlier in the year, many businesses will be nervous to make any real commitments until they know whether further costs are heading their way,” said Richard Carter, head of fixed interest research at Quilter Cheviot.
The unemployment data comes just weeks before the 26 November Budget, when the Chancellor is expected to address a fiscal gap estimated at £30bn. While government ministers insist that “the British economy is still generating jobs”, critics argue that rising unemployment and slowing wage growth reflect policy missteps that have “piled red tape on businesses” and weakened confidence.
The Bank of England expects unemployment to peak slightly above 5% in 2026, but economists caution that persistent hiring freezes could slow recovery further if confidence fails to return.
The UK is set to increase its bank deposit protection limit to £120,000, a move designed to keep pace with inflation and strengthen public confidence in the financial system. From 1 December, the Financial Services Compensation Scheme (FSCS) will offer a higher level of protection to individual depositors, up from the current £85,000.
The Bank of England (BoE) had originally proposed a rise to £110,000 earlier this year. However, continued inflationary pressures, with consumer prices still 3.8% higher year-on-year in September, prompted regulators to go further. The Treasury has now approved the adjustment, which aims to ensure that real-terms protection for savers is not eroded over time.
For the financial services sector, the change will mean a higher collective contribution to the FSCS, which reimburses customers if a bank or authorised financial firm fails. The BoE expects the extra annual cost for firms to be relatively small, at less than 0.1% of banks’ net income, though firms will also face an estimated £44 million in one-off expenses for updating systems and customer materials.
The change follows renewed scrutiny of deposit protection frameworks after the collapse of Silicon Valley Bank in the US highlighted how quickly depositor confidence can be shaken. While most UK retail customers hold significantly less than the protection limit in any single account, regulators view the uplift as an important safeguard for maintaining trust and stability.
Since its launch in 2001, the FSCS limit has risen several times, climbing from an initial £31,700 to £85,000 in 2017. The scheme has paid out more than £26 billion to customers of failed firms over the years.
Consumers experiencing a temporary surge in funds, such as from a house sale, inheritance, or life insurance claim, will also benefit from an enhanced six-month protection window. This temporary coverage will increase from £1 million to £1.4 million.
According to Sam Woods, Deputy Governor for Prudential Regulation, the updated limit will “help maintain the public’s confidence in the safety of their money” at a time of ongoing economic uncertainty.
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