The Financial Conduct Authority’s (FCA) first Regulatory Priorities report for insurance marks a clear and welcome evolution. Replacing the old portfolio letters, it is intended as a single, annual statement of intent to boards and senior leaders. It is more concise, more thematic and, in places, more direct. For MGAs, it deserves careful reading.
Three areas stand out: claims handling, delegated authority and the regulator’s expectations around technology.
To my mind, claims should be front and centre irrespective of market conditions and we at the MGAA have continued to bring all stakeholders together to improve customer delivery over the past 6 months. The FCA is unequivocal that too many consumers still have poor experiences when they need their cover most. The report reiterates expectations that firms respond promptly, fairly and transparently, and that they actively test whether products and services are delivering good outcomes in line with the Consumer Duty. That emphasis on outcomes, not process, is important.
For MGAs, this goes well beyond rhetoric; it is worth noting here that over 90% of the Association's MGA members outsource claims to a third party. The regulator confirms it will continue supervisory and enforcement investigations into home and travel claims, monitor interventions and analyse service quality. It also makes clear that it is expanding its review of oversight of outsourced claims processes to include different delegated authority models and remuneration arrangements. In the timeline, this is reinforced with a specific oversight review of outsourcers and delegated authority models.
That is a direct signal to the delegated authority market. Delegated claims authority is not a peripheral feature of our sector. It is integral to the value proposition of many MGAs, particularly in specialist and niche classes where speed, expertise and proximity to the customer make a tangible difference. The FCA’s scrutiny should not be read as hostility to that model. It is a recognition that where responsibility is shared, accountability must be crystal clear. It will also undoubtedly shine a strong light on the customer journey, especially within the MGA sector. The potential number of hand-offs during the claims process, broker, MGA, carrier, third party and finally supply change provider, highlights where our eco-system complexity could harm the customer. It will be important that we demonstrate absolute customer journey clarity when responding to the FCA review.
Boards of capacity providers and MGA principals alike will need to evidence robust oversight frameworks, strong management information and clear lines of responsibility under the Senior Managers regime. Remuneration structures within delegated authority arrangements will also come under the microscope. The direction of travel is obvious: firms must be able to demonstrate that incentives align with fair claims outcomes, not simply loss ratios.
Technology is the other major theme running through the report. The FCA explicitly encourages experimentation with AI and the use of its Sandbox and AI Lab, while stressing that firms must monitor consumer outcomes closely and mitigate risks. It will evaluate the risks and opportunities of AI in underwriting, claims and customer service, and identify barriers to adoption.
For MGAs, many of whom are digitally native or operate with leaner technology stacks than traditional carriers, this is an opportunity. Automation in claims triage, fraud detection, reserving and customer communication can materially improve both efficiency and customer experience. But the regulator’s message is clear: innovation does not dilute responsibility. The Consumer Duty applies just as firmly to an algorithm as it does to a human handler.
The report also signals continued focus on operational resilience and reporting around material third parties. In a delegated authority context, this reinforces the need for careful due diligence and ongoing monitoring of TPAs and other outsourced providers.
At the MGAA, we welcome the clarity this report provides. We have long advocated for proportionate, predictable regulation that supports growth while protecting customers. The FCA’s commitment to being a smarter regulator and to simplifying insurance rules where possible is encouraging. Equally, the emphasis on growth and innovation, including work on AI and emerging risks, aligns with the strengths of the MGA model.
Crucially, this is not a one-way conversation. We maintain regular, constructive dialogue with the FCA, and we are pleased that senior figures from their Insurance Division continue to engage directly with our members through forums such as our Compliance Insights meetings. That dialogue matters. It allows us to share practical insights from the delegated authority market, challenge where necessary, and support members in interpreting regulatory expectations in a commercially realistic way
The new Regulatory Priorities report should not be seen as a warning shot for MGAs. It is a call to demonstrate what our sector does well: specialist underwriting, responsive claims handling and smart use of technology, all underpinned by strong governance.
If we can evidence that delegated authority delivers fair value, high-quality service and clear accountability, then the model will not simply withstand scrutiny. It will continue to prove why it is such a vital and innovative part of the UK insurance market.
The MGAA provided a summary of the report - and its implications for members here - FCA Regulatory Priorities 2026: What They Mean for MGAs and the Future of Delegated Underwriting - MGAA
