Reeves unveils inaugural financial services growth and competitiveness strategy

By Rebecca Delaney

July 16 - (The Insurer) - UK Chancellor Rachel Reeves has said the UK government will provide targeted regulatory support to sectors which hold an existing competitive advantage, including insurance, under its inaugural financial services growth and competitiveness strategy.

Unveiling the strategy in her Mansion House address on Tuesday evening, Reeves said it included "the most wide-ranging package of reforms" to financial services regulation in more than a decade.

According to Reeves, the UK financial services sector is worth around 10% of total economic output and supports 1.2 million jobs in clusters around the UK.

The UK insurance sector has been vocal on the need to slash “over-burdensome” regulation, with the British Insurance Brokers' Association penning an open letter to Reeves earlier this week in which it called for urgent action to a halt a “downward spiral” in productivity.

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

On Tuesday, the UK government launched a consultation on its Risk Transformation Regulations, while the Prudential Regulation Authority also confirmed new authorisation targets for certain ILS arrangements under the accelerated insurance special purpose vehicle regime.

"We have ripped up the planning rules, we have swept away regulations, we have published our industrial strategy, and today we can go further, by announcing the Financial Services Growth and Competitiveness Strategy," said Reeves.

She added: "At Mansion House last year, I said we must regulate for growth and not just for risk … and we are delivering on that commitment."

A cornerstone of the strategy includes providing targeted regulatory support to sectors in which the UK already holds a comparative advantage other international peers.

"For insurance, where Britain is the destination of choice for underwriting complex, specialised and high-value risk, I am introducing a new competitive framework for captive insurance," said Reeves.

The announcement on Tuesday that the PRA and Financial Conduct Authority are planning to consult on policy proposals for this in summer 2026 has been welcomed by UK insurance industry representatives.

The wider strategy was welcomed by the Lloyd's Market Association (LMA) for recognising the role of the UK insurance sector.

"The clarity that the government must enable regulators to regulate for growth as well as risk without diluting their reputation internationally should enable our market to compete more effectively internationally," said Arabella Ramage, legal and regulatory director at the LMA.

"Our members' international competitiveness – and their ability to attract new capital and talent – will also be much enhanced by the proposed streamlining of the senior managers and certification regime, and will feed into the ambition of faster authorisation of new firms, the proposed new regime for captive insurers and reforming the Financial Ombudsman Service."

Ramage added that the LMA in particular welcomes proposals to streamline product governance and fair value requirements.

"We are pleased to see the call for regulators to take specific steps to support our members writing large risks and innovative lines by streamlining the product governance and fair value requirements, and removing unnecessary consumer protections for large or specialist customers," she said.

"Many of these reforms require further consultation and, in some cases, legislation. We very much hope that the impetus is maintained.”