The FCA’s 2026/27 Work Programme places growth alongside smarter regulation, consumer support and financial crime as one of its four strategic priorities. For the insurance sector, this growth agenda focuses on innovation, access, new products, emerging risks, and more proportionate regulation.
The FCA’s insurance priorities report states that a growing insurance market can allow firms to invest in technology, develop products and respond to new risks. It also encourages firms to explore how AI can help and use FCA innovation services, including the AI Lab and Sandbox.
For insurance and actuarial teams, the opportunity comes with additional responsibility, as growth will depend on accurate pricing, reliable claims analysis, capital assessment, product value and evidence of good customer outcomes. If new products, data sources or technology are introduced without strong actuarial, risk and governance input, firms may create further complexity rather than sustainable growth.
As the FCA continues to explore AI in insurance, cyber insurance and captive insurance, firms will need to show that innovation is supported by clear expectations around consumer outcomes, proportionality and risk management.
Growth still requires discipline
The FCA is encouraging firms to innovate and compete, but remains clear that firms must take responsibility for risk and monitor consumer outcomes. Growth therefore needs to be supported by reliable evidence.
Pricing decisions, reserving assumptions, claims projections, product design and capital planning all depend on strong data and appropriate challenge, particularly where firms are developing products for emerging risks or using AI and new technology in underwriting, claims, pricing or customer service.
As insurers explore new markets or new ways of operating, actuarial teams will need to connect technical analysis with product governance and commercial decision-making. A product may support growth, but firms still need to understand how it performs across pricing, claims experience, distribution costs and customer outcomes.
Innovation, AI and new technology
The FCA is encouraging firms to use innovation services, such as the AI Lab and Sandbox, to test ideas and understand how new approaches can be developed responsibly.
AI and technology can support underwriting, claims handling, pricing, fraud detection, customer service and operational efficiency. In actuarial work, better tools can improve data analysis, scenario modelling, forecasting and portfolio monitoring. However, these benefits depend on the quality of the data, the design of the model and the controls around how outputs are used.
Cyber insurance highlights the difficulty of expanding into areas where risk is still evolving. The FCA has confirmed that it will review cyber insurance coverage and examine the risks, opportunities, and barriers to adoption. For actuarial teams, cyber risk can be difficult to price because historical data may be limited, exposure patterns can change quickly and accumulation risk can be hard to assess.
As such, firms developing products for emerging risks will need robust scenario analysis, clear assumptions, and close links among actuarial, underwriting, claims, risk, and operational resilience teams.
Captive insurance and new market opportunities
Captive insurance is a further point on the FCA’s growth agenda, as the FCA and PRA are consulting on a new, proportionate regulatory framework for captive insurers in the UK, designed to reflect the lower risks captives may pose compared with conventional insurers.
A UK captive regime could create new opportunities for businesses reviewing their risk financing, capital planning and insurance strategy, but it also creates specific considerations for insurance and actuarial teams. Firms need to understand which risks are being retained, how those risks should be priced, what capital may be required and how the captive would be governed.
The proposed framework is intended to be proportionate, but captive structures will still need appropriate governance, clear risk ownership, reliable financial information and evidence that the arrangement is suitable for the risks being insured.
Simplification still depends on good data
The FCA has confirmed changes to simplify insurance rules and reduce unnecessary requirements, while maintaining appropriate levels of customer protection, and has also said it will review regulatory returns to ensure it asks firms only for the information it needs.
Simplification may reduce some areas of regulatory burden over time, but firms will still need accurate data, strong controls and clear evidence around decisions. If information has to be corrected or reconciled late in the process, any reduction in regulatory burden may have limited practical benefit.
Efficient actuarial, finance and risk processes will therefore remain important. Firms that can produce accurate information with less manual effort will be better placed to respond to regulatory change, assess new opportunities and support sustainable growth.
How Brighter Consultancy can help
Brighter Consultancy works with insurance firms to strengthen actuarial, finance, risk and governance capabilities. Our work supports firms as they respond to regulatory change, improve data quality, review operating models and build more effective reporting and oversight processes.
Our consultants work alongside actuarial, finance, risk, compliance and operational teams to develop practical, proportionate solutions that improve decision-making, reduce manual work, strengthen governance and ensure innovation is supported by appropriate controls.
As the FCA continues to encourage growth and innovation in the insurance market, firms will need actuarial and governance capabilities to support new opportunities while maintaining strong risk management and customer outcomes.
Speak to us about strengthening your actuarial, governance and risk capabilities as the FCA’s insurance growth agenda develops.
