Several days ago we told you about the
Financial Conduct Authority’s rumoured plans to launch a study into the wholesale insurance brokers market – and now those plans have been confirmed.
In a release this morning, the FCA announced that it “wants to ensure that the sector is working well, and fosters innovation and competition in the interests of a diverse range of clients.”
Pointing out that the London insurance market is one of the world’s leading centres for commercial and specialist risks, controlling more than £68 billion in GWP, it notes that there have been significant changes in the market with brokers developing new services and business practices. Now it wants to ensure that effective competition keeps London as an international centre for insurance.
“Given the size of the wholesale insurance sector and the type of large scale risks it covers, the way it functions can have a wide-ranging impact on the broader economy,” said Christopher Woolard, FCA executive director of strategy and competition. “If businesses cannot get appropriate cover or pay more for services than they should, it can impact on their ability to operate and grow.
“Brokers play an important part in the wholesale insurance sector ensuring clients get appropriate coverage at good value. However, following significant changes in the sector, we are looking at the dynamics to ensure competition is working well.”
The FCA aims to publish an interim report in autumn 2018.
Related stories:
FCA to launch broker probe
FCA signs agreement with Hong Kong regulator
