Blogs
15th April 2026
The Delegated Authority (DA) model is powering rapid expansion across the insurance market, proving itself indispensable to modern distribution. But as the market accelerates, regulatory complexity and legacy manual workflows continue to hold it back.
The Delegated Authority (DA) model is a crucial component of a successful insurance market that is rapidly growing year on year. Being a vital distribution channel in the London insurance market and within Lloyd’s, it allows insurers to delegate underwriting to various third parties, particularly MGAs, enabling them to access a wider network of specialists who can underwrite unique and complex risks.
Lloyd’s reports that delegated underwriting makes up around 45% of the industry’s premium income. The Insurance Network’s research also uncovered that a great number of insurers have 60% of their business “distributed on a delegated basis”.
With this exponential growth and adoption of the delegated authority model comes great regulatory pressures and operational challenges, with compliance increasingly becoming a lever for scalability and performance.
In this blog, we’ll explore how legacy systems are putting a strain on operational resilience, the role of RegTech and robust compliance data in achieving operational success, and how REG supports CNA Hardy in reducing its regulatory burden and becoming more resilient.
While firms operating within the DA model are increasingly automating their compliance duties, many are still relying on outdated, fragmented and error-prone manual processes to conduct due diligence and risk assessments on their third parties.
This is well known to expose them to financial and reputational damages. But more importantly, it creates significant operational risks and gaps that slow business, impact scalability and undermine trust.
For instance, the Vitesse Team highlighted that Lloyd’s syndicates face a complex compliance challenge in managing delegated authority, where additional oversight requirements and reliance on manual, point-in-time reporting limit real-time visibility of fund governance.
They said: “Lloyd’s syndicates managing delegated authority at scale have demonstrated that governance oversight and operational flexibility are not in tension. When the infrastructure connecting them is right, both improve simultaneously.”
Additionally, heavily relying on manual audits and reactive controls ultimately leaves gaps in a firm’s compliance framework. Instead of having access to real-time automated audits with advanced dashboards and analytics, firms find themselves stuck in an endless, time-consuming loop that is based on reactive rather than proactive compliance.
This, in turn, creates massive operational inefficiencies across the already complex insurance distribution chain, which then impacts long-term productivity and revenue.
As the FCA’s regulatory expectations and rules increase, manual processes can no longer cut it. The market is now moving toward embedded or unified compliance, where oversight is built directly into operational workflows rather than sitting alongside them.
RegTech is plays a central role in this shift. By connecting insurers, MGAs, brokers and coverholders through a single, data-driven ecosystem, it enables continuous monitoring of risk, compliance and performance across the entire delegated authority lifecycle.
Instead of relying on periodic bordereaux reviews or audits, firms can access live, standardised data, improving transparency and reducing the risk of discrepancies or delays, which leads to long-term operational resilience.
Embedded compliance and RegTech allow organisations to align governance with day-to-day activity, turning compliance from a reactive burden into a proactive, value-driving function.
As a result, firms that adopt unified, technology-enabled approaches are better positioned to scale delegated authority operations, strengthen partner relationships and deliver more consistent outcomes across the market.
Reliable and robust data is the lifeblood of operational success in the delegated authority distribution model due to its transparency, risk mitigation and faster, smarter and safer decision-making across all parties.
Having access to up-to-date data ensures that only assessed brokers, MGAs or coverholders are engaged with, which improves underwriting and reduces poorly managed risks.
When insurers have clear visibility into the regulatory data of parties they delegate authority to, they can deploy capacity with confidence. This makes it easier to identify issues earlier, and be certain that long-term, risk-free partnerships can be formed and maintained, ensuring regulatory requirements are met at all times.
Finally, RegTech reduces operational burden and frees up time and resources to focus on higher-level strategic and commercial initiatives, enabling firms to automate mundane administrative tasks they once had to complete manually and onboard a larger network of delegated partners more efficiently.
CNA Hardy is a leading commercial insurance provider operating in the Lloyd’s and other markets, providing unique and specialised innovative products.
Grappling with fragmented, manual and paper-based due diligence, broker onboarding and ongoing “Terms of Business Agreement” TOBA administration, the firm approached REG to improve and automate these processes.
The REG Network significantly improved CNA Hardy’s regulatory oversight by giving a real-time, centralised view of all broker partners. It also streamlined onboarding by automating due diligence, reducing administrative work and allowing more focus on commercial priorities for both insurers and brokers.
According to Andy Clements, Head of Distribution, Sales & Marketing: “The efficiency saving is being reinvested in more time spent with brokers and clients, strengthening relationships and delivering our specialist solutions. It’s a great example of how technology can greatly enhance outcomes for insurers, intermediaries and policy holders.”
Given the challenges that firms experience when managing and controlling risk, REG has recently introduced REG Risk 365, revolutionising how businesses assess, track, and act on counterparty risk, enabling them to have all year-round risk visibility over third parties and partners.
With the ability to define unique risk appetite and criteria, firms are now able to create several templates in the Risk 365 portal and use them accordingly based on their risk appetite, allowing them to generate risk scores across various criteria automatically.
An always-on risk-monitoring approach strengthens operational resilience in the long run, making organisations proactive about risk and enabling stronger relationships based on trust and transparency.
As one of REG’s loyal customers reported after using this new module: “REG Risk 365 is great for distribution and would be great for risk control. We’re loyal customers and huge fans. We talk about REG all the time.”
The delegated authority ecosystem will continue to grow as insurers (carriers) increasingly rely on third parties to underwrite specialised risks. As the Insurance Network highlights, the delegated authority market is “a fertile ground for innovation – a place to test new products efficiently.”
While compliance requirements and operational friction remain inherent challenges within the DA model, they should not be viewed as barriers, but rather as long-term competitive advantages that drive resilience, scalability and operational success.
Moving forward, investing in RegTech is the only way for firms to strengthen operational resilience and stay on top of the ever-changing regulatory landscape. Without it, firms operating in the insurance market risk breaching regulatory requirements, being subject to financial losses, and falling behind competitors.
Speak to a member of the REG Team to learn how our platform can help you achieve compliance and operational resilience within the complex DA ecosystem. We’ll also be at this year’s DA Strategy Day on 23rd April 2026. We’d be happy to organise a meeting then and dive deeper into the topic and our services.
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