Mansion House: time for world-class regulation for a world-class insurance market
Dear Chancellor,
Access to the right insurance is critical to ensure a well-functioning, growing, economy. Insurance brokers work for the client. However, it is increasingly hard for individuals and businesses, to access the advice and products they need because of the challenges caused by over-burdensome regulation on insurance brokers.
When you unveil your Financial Services Growth and Competitiveness Strategy at Mansion House, the British Insurance Brokers’ Association is calling on you to put this into reverse and help put the economy on the right track. The insurance broking sector is a £100 billion British success story supporting jobs across the economy and directly employing more than 100,000 people.
At the heart of a functioning market is strong, pro-market regulation with the interests of the consumer at the centre. Good, proportionate regulation is vital for consumer protection, encourages investment and gives customers peace of mind through Financial Conduct Authority (FCA) regulated firms, access to the Financial Ombudsman Service for complaints, and to the Financial Services Compensation Scheme if a firm fails. These three pillars provide confidence that clients are in a safe harbour.
If the regulator’s framework and remit is out of kilter, the consequences could be severe. Now is the time to stop the downward spiral on productivity, to encourage new firms to start up, and to persuade the smaller businesses that serve the local communities to stay in the sector.
In Q1 2025, only two new general insurance brokers were authorised by the FCA, while over the same period dozens threw in the towel. This is the canary in the coal mine for a sector that is a cornerstone of the UK economy.
We need action now.
We want to support the Government’s growth agenda, which is only possible if it is underpinned by world-leading regulation which acts as a force multiplier for the UK at home and abroad.
In November, you charged the FCA with a mandate to compel them to regulate for growth. This month, you should ensure they deliver, beginning with clearing out the garage of the highly prescriptive rulebook that currently makes the UK the most expensive place in the western world to operate as an insurance broker.
If a regulated firm steps out of line, they should face the consequences. But interventions should not be at the expense of the entire market.
Now is the time, Chancellor, for bold action – not just cutting red tape, but resetting regulation around a vision of a far more proportionate regulatory framework, where we reduce unnecessary complexity and encourage innovation.
The FCA’s recent consultation on ‘simplifying insurance rules’ is a welcome start, but real growth demands a far more balanced rulebook and reasonable reporting requirements which do not hinder our everyday operation or our own ambitions for growth.
It’s time to show that a world-class insurance market deserves world-class regulation.
As you stand at Mansion House, I encourage you to use this golden opportunity to embrace a new way of thinking – one where the FCA proactively supports firms, works with industry and trade associations to share best practice, and measures progress with clear metrics on growth and competitiveness.
Together, we can create a more proportionate framework with quick responses, streamlined reporting, and the conditions which welcome start-ups, encourage them to become scale-ups, and secure the future growth and competitiveness of this vital sector.
Yours sincerely
Graeme Trudgill FCII, Chartered Insurance Practitioner
Chief Executive
British Insurance Brokers’ Association