REG Reviews

REG Reviews – September 2022

1st September 2022

Welcome to the September edition of REG Reviews!

Last month we finally confirmed the changes to the Appointed Representative regime, saw insurers reviewing policies in the wake of ‘warlike’ cyber attacks and understood why the Insurtech sector is suffering from an investor confidence dip.

Read these articles and many more, along with our usual updates from REG and the Regtech sector.

Industry News​


Biden Admin Announces $3 Billion in FEMA Climate Resilience Funding

On Friday 12th, The Biden Administration announced it will be investing more than $3 billion into two federal programs to assist communities challenged by floods, wildfires, extreme heat and other problems imposed by climate change. 

The Building Resilient Infrastructure and Communities (BRIC) programme’s funding will more than double to nearly $2.3 billion in helping protect people and infrastructure form natural hazards and the effects of climate change.  

Seeing a five-fold increase in funding to $800 million is the The Flood Mitigation Assistance programme, which funds projects to help mitigate flood risks for homes and communities.  

Some of the funding for the two Federal Emergency Management Agency programmes will come from last year’s bipartisan infrastructure law, with $700 million for the flood programme, and $200 million for BRIC. The rest will come from FEMA’s Disaster Relief Fund. 

“Chronic lack of investment in climate resilience has only made matters worse for America’s crumbling infrastructure,” FEMA Administrator Deanne Criswell said in a statement. 

Last year, in just one example of the type of disaster that scientists say are made worse by climate change, Hurricane Ida hit Louisiana as a Category 4 storm, killing nearly 100 people and causing an estimated $64 billion in damage. 

The White House said in April that the upper range of climate change’s hit to the U.S. budget by the end of the century could total a 7.1% annual revenue loss, equal to $2 trillion a year in today’s dollars. 


The Final Rules of the Appointed Representative Regime are here…

This month, the FCA detailed that Principal Firms are now responsible for ensuring they comply with the Appointed Representative regime’s new legislation. The regulator believes that the new rules will help prevent consumers being mis-sold or mis-led by ARs and will prevent misconduct by ARs undermining markets operating fairly and safely.  

In response to the survey issued to Managing Directors/CEOs of Principal Firms in October 2021, where the FCA noted that, whilst some Principals Firms currently effectively oversee the activities of their ARs, many still do not adequately do so, the regulator has now published the revised rules that all Principal Firms must adhere to by December 8th 2022.

As part of the three-year strategy to improve outcomes for consumers and markets, the FCA is also undertaking targeted supervision of Principal Firms across the whole financial services sector. The new rules do not change the fact that Principals are responsible for the activities of their ARs. The FCA is working with HM Treasury to explore if further changes are needed to the AR Regime, which would require future legislative change. Principal Firms are interested to see the effects of the new rules which were originally meant to be published earlier this year in Q2 2022. 

If you are unsure of what the new legislation revisions mean for you and your firm, REG have recently released their ‘Principal Firms – Time to Act’ whitepaper, which addresses the new rules and actions needed to be taken. REG want to make sure you are prepared for December 8th, so download the whitepaper here to understand how REG can help you operate compliantly and manage these challenges efficiently. 


New UK Telecoms Regulations Enforced to Strengthen Cyber Security

Tough new security rules have been imposed on the UK telecoms sector to provide better protection against cyber attacks. On 30th August 2022, The Department for Digital Culture, Media & Sport published a Press Release outlining these new regulations, which will be effective from October this year.

Currently direct control of security standards within their networks lies with the telecoms providers themselves. However, the new rules come into force after findings from the government’s Telecoms Supply Chain Review identified telecoms providers ‘often have little incentive to adopt the best security practices.  

Indeed, since November the Telecommunications (Security) Act law allows the government to boost the security standards of the industry’s networks. This privilege extends to electronic equipment and software at phone mast sites and in telephone exchanges which handle internet traffic and telephone calls.

Developed with the National Cyber Security Centre and Ofcom, the new code of practice will improve the UK’s cyber resilience. The regulations detail specific actions for UK public telecoms providers to adhere to and fulfil their legal duties in the Act.

The government confirmed rules embed good security practices in providers long term investment decisions and the day-to-day running of their networks and services. UK Telecoms providers are now obliged to adhere to the following:

  • Protect data processed by their networks and services, and secure the critical functions which allow them to be operated and managed
  • Protect software and equipment which monitor and analyse their networks and services
  • Have a deep understanding of their security risks and the ability to identify when anomalous activity is taking place with regular reporting to internal boards
  • Take account of supply chain risks, and understand and control who has the ability to access and make changes to the operation of their networks and services to enhance security

Ofcom will be responsible for the oversight and monitoring of firms’ compliance, with powers to carry out inspections. If unadhered to, the regulator is permitted to enforce legal action; with fines possible to total 10 per cent of turnover, or £100,000 per day for contravention.

Digital Infrastructure Minister, Matt Warman, echoed the importance of mobile and broadband networks being protected from cyber threats;

“We know how damaging cyber attacks on critical infrastructure can be, and our broadband and mobile networks are central to our way of life. We are ramping up protections for these vital networks by introducing one of the world’s toughest telecoms security regimes which secure our communications against current and future threats.”


REG Automates Swedish Regulatory Licensing Data

We are pleased to announce that our in house technology team have completed their work to automate the Swedish regulatory licensing data. Finansinspektionen is Sweden’s Financial Supervisory Authority. Users of the REG Network are now able to receive instant alerts on new/lost authorisation and changes on all of Sweden’s 320 insurance companies. Amongst the 230 firms, 40 are life insurance companies, with the remaining 280 non-life insurance businesses.

The team at REG continues to connect our customers with instant, reliable data direct from source, enabling them to meet their legal and regulatory requirements without hampering trade.

Wanting to monitor Swedish insurance companies? Login to the REG Network.


Investor Confidence Dips as Insurtech Hit by Cost-of-Living Crisis

The effects of the cost of living crisis have not been avoided by the Insurtech sector; staff layoffs and modified business models indicate that the market must evolve. It seems Investors are more worried about capital loss than they are about rising inflation and interest rates, according to Schroders’ latest UK Financial Adviser Pulse survey.  

The findings showed that concerns about overall returns and the rising cost of living were having the biggest impact on investor sentiment at present, which has tipped to a majority bearish stance (57%). Back in the last instalment in November 2021, only 12% reported that their clients were bearish with the majority (41%) holding a bullish outlook. This has now dropped to just 7%.  

In the section on long-term trends, advisers also revised their growth forecasts from their previous study, with 41% of them stating that they anticipate equity returns to be lower than historical norms over the next five years, a decrease of roughly 20% from the conclusions from November.  

The war in Ukraine and the international response to Russia’s invasion had boosted expectations for higher volatility, rates, inflation, and disruptions from geopolitical issues. 

69% of the respondents said that their clients will have to adjust their investment plans due to the cost of living crisis. Doug Abbott, head of UK intermediary at Schroders, said that the crisis is “reducing people’s ability to save because people are spending more every month”.  

Rising prices are challenging how far many will be able to go now, day-to-day and long-term in markets. 


“No Reliable Evidence” Leads to Tribunal Reversing £17.9 Million Fine

The Competition Appeal Tribunal has set aside a £17.9m fine imposed by the Competition and Markets Authority (CMA) onto price comparison website (PCW) Compare the Market. The decision was decided after the competition regulator’s investigation into Compare the Market’s use of most favoured nation clauses for home insurance was based on “no reliable evidence”. 

CMA originally issued the fine in November 2020, stating that an investigation launched in September 2017 had found that between December 2015 and December 2017, Compare the Market had imposed wide most favourite nation clauses on 32 home insurance providers using its site. 

This meant that home insurers advertising policies through Compare the Market were not able to offer lower prices for the same policies either on their own websites, other direct channels or via any other PCWs, ensuring that Compare the Market was the only distribution channel showcasing the lowest available prices for the specified home insurers. 


Insurers Rethink Policy Exclusions in Wake of 'Warlike' Cyber Attacks

Insurers selling cyber-insurance policies are starting to face apprehension around the coining of cyber war and state-sponsored cyber attacks as ‘warlike attacks’. Many insurance policies exclude coverage for acts of war and with the increasing international threat in the wake of the Russian-Ukrainian war, insurers are reasoning state-sponsored cyber-attacks should also apply to policy exclusions.

The possibility that Russia might combine its physical attacks on Ukraine with cyber-attacks aimed at weakening critical infrastructure and information systems would forecast the cost of billions for insurers; not only in Ukraine, but also in countries such as the US and the UK, where most cyber-insurance policies are sold.

Indeed, Russian cyber attacks already weigh heavy on claims paid out by insurers. The NotPetya attack in 2017, which hacked data from computer systems of companies in over 60 countries, was widely suggested that Russia and its government were to blame. The repercussions were extensive and spanned a vast multitude of industries from energy to shipping and ensued the forced closure of business operations for days. $10bn in damage was reported by The White House to be paid, denoting the attack as “the most destructive and costly cyber attack in history.”

The aftermath saw many insurers denying NotPetya-related claims due to referring to the attack as a ‘warlike act’ because a government was behind it. Mondelez’s $100m claim was denied by Zurich, whilst a group of over 20 insurers refused $1.4bn from Merck. However, due to the inability to attribute a particular perpetrator to the ambush, Merck won its case die to the court stating war exclusion ‘applied only to traditional forms of warfare’.

Now, with the amounting apprehension around Russian provoked cyber attacks, Lloyd’s of London issues a bulletin earlier this month informing that ‘when writing cyber attack risk, underwriters need to take account of the possibility that state backed attacks may occur outside of a war involving physical force’. In efforts to better protect the fallout of insurers in such circumstances from having to pay exasperated expenses in claims, Lloyd’s insist firms should explicitly state exclusions from these certain type of attacks from their coverage which don’t directly sufficient the term ‘warlike’. Emphasis was particular made on attacks that ‘significantly impair the ability of a state to function’ or ‘that significantly impair the security capabilities of a state’.

However, significant shortcomings will unveil for both insurers and policy holders if these exclusions start to enact. Even though these exclusions ensue a reduced potential loss for insurers if such attacks were to occur, people will be deterred from buying policies that don’t cover them from the ever more so commonplace state-sponsored attacks. This would position policy holders as vulnerable to such attacks, with the removal of protection making it somewhat impossible for them to receive financially if targeted.


It's Time to Say Goodbye to This Year's Marketing Interns!

After 410 days we are sadly saying goodbye to our Marketing Interns, Ellie Moeran and Julia Palos. They joined REG Technologies in July 2021 to undertake their placement year in industry, as part of their Business Management and Marketing degrees at Nottingham Trent University. REG’s proud partnership with Nottingham Trent University allows students to experience the corporate working life first-hand, providing extensive benefits for both placement students and the company.

Indeed, a true testament to this partnership is our previous Marketing Intern, Zoe Parsons’ success story. After Zoe previously worked as a Marketing Intern during her placement year at REG from 2020-2021, she has recently rejoined REG as Marketing Manager after completing her final year studies in June 2022. Placement years are a fantastic opportunity for students to gain ‘on the job’ experience and prepare them for career prospects post-graduation. While also bringing fresh ideas and perspectives to the firm and its people!

We would like to thank Ellie and Julia for their commitment and contribution to REG’s marketing activities throughout the year. During their work placement at REG they have been able to build upon theory learnt at university and apply their knowledge to a multitude of marketing areas. This includes; social media, email campaigns, marketing analytics, networking events, monthly newsletters and graphic design. 

We hope Ellie and Julia have enjoyed their time at REG Technologies just as much as we have loved working with them. 

As they return to university in September to complete their final year of studies, we wish them all the best for the future and hope they can take forward their experiences and knowledge with them in all future endeavours. 

From all of us at REG we would like to say thank you and good luck to both of you, you will be greatly missed!

If you would like to hear more about Ellie and Julia’s time at REG from their perspective, click here to read their blog reflecting on their placement year. 


Abrdn Takes Stake in Digital Securities Exchange

With the agreement to become the largest external shareholder in Archax, a digital securities exchange, Abrdn has become the most recent asset management to invest in digital assets. 

Funded by former hedge fund executives, Archax provides a platform for insitutional investors to trade cryptocurrencies and tokenised securities, including fractions of shares. Established 4 years ago, Archax is the first and only digital securities exchange firm that has gained the FCA’s permissions covering trading, custody and brokerage. The exchange will launch later this year. 

In time, the asset manager will use the exchange to grant clients access to its funds in tokenised form and assets that are less easy to trade, such as private debt, private equity and buildings. 

The FT, who first reported the deal, said the stake will allow Abrdn to have a seat on the board of Archax. Abrdn’s CEO, Stephen Bird, commented: ”blockchain technologies are inevitably going to form a big part of the future of financial markets. There is potential to offer greater transparency, greater speed and less trading friction by using these nascent digital technologies. Archax is one of the most promising UK players in this next expected high growth area in finance – the use of digital and tokenised securities with same-day settlement. In that sense, the growth of the digital investment market is about much more than cryptocurrencies”. 

“With Archax, we will have meaningful footprint in this fast-developing market – which is likely to evolve in a multitude of different ways that are relevant to our core businesses. This investment not only provides an opportunity for substantial financial benefits, it also creates a partnership with some of the leading thinkers in an area that has the potential to play a substantial role in the future of finance”.  

The deal comes just a week after BlackRock announced its partnership with Coinbase. On Thursday 11th August, the company announced plans for a Bitcoin trust for institutional investors.  


Tory Party Leadership Battle Could Cause a Disruption to Regulators

The Financial Times have reported that, according to sources, Liz Truss is planning an immediate review of the UK regulator bodies (FCA/PRA/PSR) if she wins. The newspaper stated that its source said that Truss was privately critical of the FCA. This could cause disruption to the regulators as a review of the UK regulator bodies could lead to merging FCA, PRA and PSR. 

The FCA and PRA were created in 2013 following the disbandment of the Financial Services Authority. However, in recent years the FCA has faced a lot of criticism internally following a strike action over pay, terms and condition and trade union recognition. Our new Prime Minister will be announced on Monday, September 5th 2022, and it is expected that the winner will become Prime Minister officially the following day. This means we won’t have long to wait to find out whether a merge is possible. 


Bitcoin Deemed 'Worst Cryptocurrency' by Cyber Capital Founder

Justin Bons, Founder and Chief Investment Officer of crypto-focused fund Cyber capital has recently declared Bitcoin (BTC) as ‘technically one of the worst cryptocurrencies. This, in part, is noted to be due to its lack of technological progress; stating the digital currency is ‘purely speculative asset without utility’.

Established in 2009 by, Bitcoin was created to accelerate electronic peer-to-peer transactions. Over the years, the digital monetary asset has been esteemed to be an inflation hedge, store of value and digital gold. However, Satoshi Nakamoto stated that the currency’s investment value is simply a by-product of its primary purpose.

Even though Bons once advocated for the currency’s prowess in 2014, Bons has withdrawn his defence and instead insisted ‘the reality is that BTC has dramatically changed since that time’. His argument supported by decisions to not increase the block size limit representing a major departure from the original version and purpose of Bitcoin’.

In a tweet on 28th August 2022, Bons described its weak comparative economic qualities to be influenced by BTC competition ‘with cryptocurrencies that can achieve negative inflation […] due to fee burning, high capacity & high utility […] such as ETH post-merge & alternatives such as AVAX, NEAR & EGLD.”

As a renowned full-time crypto researcher since 2014, having established one of Europe’s oldest cryptocurrency funds and infamous outspoken figure in the community, Bons’ claims have now positioned the cryptocurrency to be falling behind competitors as ‘it lacks capacity, programmability and composability’.

Bons is not alone. In fact, in June 2022, Yifan He, Chair of China’s Blockchain Service Network (BSN) reported to Cointelegraph that ‘all unregulated cryptocurrencies including Bitcoin are Ponzi schemes.’

Moreover, accusations that Bitcoin is ‘nothing more than a speculative tool in comparison to other digital assets like XRP, which is primarily used to facilitate cross-border payments.’


Join us to Discuss the 'Future of Technology' at REG's Networking Event...

Technological disruptions are continuously transforming global operations and accelerating trade in a multitude of industries. But what does the future of digitalisation look like for the insurance sector?

After a successful Networking Event in July, which entailed a panel discussion centred around Young People Insurance, the barriers the face entering the market and what employers can do to heighten interest in recruitment of young talent, we are pleased to announce our September Networking Event. We look forward to seeing some familiar and new faces at our Lime Street Office on 28th September 2022, to join us for an insightful evening discussing the future of technology

Joining the panel will be Paul Templar, CEO and Co-Founder of VIPR, and Diogo Luis, Chief Technology Officer at REG Technologies. Our guest speakers will be covering the insurance industry’s position against other industry in terms of digitisation, the barriers to accelerating digitisation in the market and what emerging technologies may play a big part in the future of the industry.

Paul is co-founder and CEO at VIPR Solutions since 2019. Prior to that, Paul was CTO for 11-years having an instrumental role in designing the VIPR products ecosystem that VIPR have developed for data and bordereaux management, coverholder and binder management and extensive analytical reporting capabilities. Having involvement in all aspects of the software delivery cycle from initial presentations to final sign off, Paul’s role has been varied and rewarding as CTO from 2009 – 2019. Serving almost 40% of the Lloyd’s Managing Agents, Paul is a well-respected CEO within the London Insurance Market and beyond. Paul is passionate about all things IT, Data and Tech and loves finding solutions to complex challenges.

Diogo is our Chief Technology Officer at REG Technologies. Having an extensive portfolio of completed software projects at firms such as Exxon Mobil, CLS and Messier-Dowty, he is responsible for overseeing the development and dissemination of technology for external customers, vendors, and other clients to help improve and increase business.

If you would like to join us for an insightful evening, please register your interest here. 

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REG Technologies

REG Technologies powers the insurance world to accelerate compliant trade. Helping insurance businesses trade faster, smarter, safer.

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