FCA speaks on key role of insurance brokers

Emily Shepperd has spoken on the key role insurance brokers have to play in the financial ecosystem. She focussed on the recent significant growth in brokered markets, and how future regulation might affect the industry. She said that no major new changes are planned, and that generally the FCA will make changes to protect customers and therefore in fact also regulated businesses. She explained why the FCA had written to many insurance CEOs last September about multi-occupancy business insurance and GAP insurance.

She moved on to discuss the Consumer Duty, an where the FCA thought the insurance industry was struggling to embed expectations in respect of MI systems. So this is a risk that firms should be looking to address. However, she also noted how the FCA is working with the industry to minimise the impact where appropriate – for instance in dealings with overseas brokers and customers and said the FCA is looking to see what it could do to simplify things without lessening regulatory protections or becoming prescriptive where it cannot or should not be. She also highlighted the risks and challenges that will arise from developing AI, and the more human risks of non-financial misconduct and company culture – another area where insurance brokers have traditionally fallen below expectations.

Emma Radmore