Specialty insurers and regulated firms in the UK market say financial regulators have made notable progress in performance between 2024 and 2025, according to a new survey by the London Market Group (LMG).
The Financial Conduct Authority (FCA) saw its sentiment index rise 20 points to 91 out of 100. The Prudential Regulation Authority (PRA) also improved, with a 12-point gain to 73.
The results reflect feedback from 100 compliance and risk leaders at London market insurers and brokers.
The survey, conducted for the second time, offers an annual snapshot of how market participants view the effectiveness of the FCA and PRA. LMG plans to continue the survey each year to track performance and industry sentiment over time.
This marks a significant step forward in the service delivered by both regulators. The LMG has long supported the use of performance benchmarks to assess regulatory focus on growth and competitiveness
Caroline Wagstaff, CEO of LMG
Wagstaff said using quantifiable metrics helps regulators maintain accountability while highlighting where improvements have been made and where more work is needed.
Simplified regulatory measures are also planned, aimed at smaller insurers, internal models, and recalibrating transitional provisions.
While these reforms will benefit insurers, particularly in the life insurance sector, major impacts may not be immediate.
Expanded eligibility criteria for the matching adjustment could enable insurers to hold more unlisted investments, broadening their asset base without increasing risk.
Changes to the risk margin and matching adjustment could yield net gains, depending on the composition of insurers’ MA asset portfolios.
The United Kingdom Financial Conduct Authority (FCA) plans to eliminate unnecessary regulations, reduce reporting requirements, introduce digital service standards, and simplify industry rules to support the U.K. government’s growth objectives.
These proposals add to the FCA’s planned 2025 reforms, according to a letter from Chief Executive Nikhil Rathi to U.K. leadership, including Prime Minister Keir Starmer.
The FCA has already indicated plans to simplify commercial insurance rules, aiming to balance competitiveness with policyholder protections.
For insurers, the FCA intends to ease conduct requirements for wholesale insurers, cut unnecessary regulations, and revise its handbook based on industry feedback. Reporting requirements will also be reduced for companies working with the Bank of England and the Prudential Regulation Authority, which oversees insurance carriers.
