UK brokers urge chancellor to slash 'over-burdensome' regulation

By Ryan Hewlett

July 14 - (The Insurer) - British insurance brokers have called on UK Chancellor Rachel Reeves to tear up “over-burdensome” regulation, warning urgent action is needed to a halt a “downward spiral” in productivity.

The British Insurance Brokers' Association (Biba) made the plea in a letter to Reeves ahead of her Mansion House speech on July 15, in which she is expected to set out the UK government’s inaugural financial services growth and competitiveness strategy.

The letter, signed by Biba chief executive Graeme Trudgill and seen by The Insurer, urged the chancellor to slash red tape in a bid to boost the sector.

“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,” the association said in the letter.

The trade body urged the government to work with regulators to create a more proportionate framework with quick responses and streamlined reporting – conditions which welcome startups and encourage them to become scale-ups.

The insurance broking sector is a "100 billion pound British success story", Biba said, with the industry supporting jobs across the economy and directly employing more than 100,000 people.

Biba said the government must ensure the UK’s financial regulators embrace a new way of thinking – one where the Financial Conduct Authority proactively supports firms, works with industry and trade associations to share best practice, and measures progress with clear metrics on growth and competitiveness.

“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,” it said.

The trade body said only two new general insurance brokers were authorised by the FCA in the first quarter of 2025 while dozens closed over the same period.

It also flagged that the FCA’s “highly prescriptive” rulebook makes the UK the most expensive place in the Western world in which to operate as an insurance broker.

“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 said.

While it is supportive of the FCA’s focus on consumer protection and penalising bad actors, Biba said such interventions should not be at the expense of the entire market.

“This is the canary in the coal mine for a sector that is a cornerstone of the UK economy,” it said.

“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.”

Biba added: “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.

“It’s time to show that a world-class insurance market deserves world-class regulation.”