The Prudential Regulation Authority’s 2026 supervisory priorities are formally addressed to insurers. But for brokers and managing general agents, the message is harder to ignore than it first appears. By placing delegated authority, underwriting assumptions and data quality at the centre of its agenda, the PRA is signalling that the risks created inside distribution chains are now a regulatory concern – even when those risks sit several steps removed from the insurer itself.
According to Jeremy Irving (pictured), partner at law firm Browne Jacobson, intermediaries should read the paper less as background noise and more as an early warning.
“This goes to the heart of many operations that insurers conduct,” he said. “And it has the potential, depending on what the PRA chooses to pursue, to raise a number of challenges about the way the UK insurance market operates.”
While brokers are not regulated by the PRA, the implications are difficult to ignore.
“It’s very difficult, on a practical basis, to conceive of the commercial insurance business in the UK without considering quite extended distribution chains,” Irving said. “Everything that is done, all the risk that is taken on, is often intermediated through multiple phases.”
If the PRA is now explicitly questioning how insurers oversee delegated underwriting, that concern inevitably extends to the intermediaries holding – or influencing – the pen.
“If the regulator is registering concern about the effect of those distribution chains for insurers, which it directly regulates, then that is a very interesting development,” Irving said.
“All those fines related to senior decision-making and senior oversight of ‘coalface’ processes,” he said. “The question is whether there is absolute clarity and transparency between what happens on the ground and what is being considered at board or ExCo level.”
With the Senior Managers and Certification Regime now firmly embedded, that, Irving suggested, is where the PRA’s attention may now be turning.
“If tested by the regulator,” he said, “could the most senior decision-makers actually point to data and information which they know is absolutely reliable and reflective of activities occurring ‘on the ground’?”
That question is particularly acute for MGAs, whose value proposition is built around superior underwriting insight and data.
“A key feature of the reason that MGAs are part of the market is the promise of better underwriting data,” Irving said. “Faster, more accurate, more comprehensive, better analysed data.”
From the PRA’s perspective, however, outsourcing that capability raises an obvious regulatory question.
“You’re the insurer; you ultimately carry this risk,” Irving said. “Why would you outsource this? And to the extent you do outsource it, are you challenging it enough?”
For brokers involved in delegated or complex placements, this increases the importance of understanding not just where data comes from, but how it is validated, challenged and escalated through the chain.
Irving acknowledged the industry’s long-standing concern that stronger governance slows innovation and increases cost. But he argued that regulatory history suggests the market adapts.
“What the PRA is saying is that the quality of data and the willingness to challenge that data are key,” he said. “So that when the data comes to the insurer, it is in its most reliable, effective, actionable state.”
Practically, that points towards a greater focus on:
“The PRA wants greater levels of engagement, more comprehensive contractual terms, and more extensive, dynamic, real-time controls,” Irving said.
For intermediaries, that creates tension with the desire to remain flexible and insurer-agnostic. But the direction of travel is clear.
“If this outsourcing is going to be increasingly subject to challenge,” Irving said, “intermediaries will have little choice but to be more engaged in a more comprehensive, holistic oversight process than they might currently regard themselves as being.”
