The UK's robust regulatory framework provides our industry with a stable foundation for operational standards, but insurers, Managing General Agents (MGAs), and delegated partners alike are feeling pressure from the considerable demands of meeting these standards.
The Financial Conduct Authority's (FCA) Consumer Duty is now fully embedded, but its impact on day-to-day operations is ongoing as insurers continue to respond to its impact on claims handling and customer engagement.
Beyond the FCA's Consumer Duty, the insurance industry is also grappling with heightened regulatory scrutiny, including a focus on environmental and climate-related risks, which demands more sophisticated governance.
The current regulatory landscape means insurers need more help than ever to remain compliant, yet our industry is facing a widespread talent shortage. Moreover, the role AI and technology can play to ease this burden is limited by concerns about the regulatory risks associated with its responsible deployment. In fact, regulatory risk was the most cited barrier (60%) to AI adoption by UK respondents in our annual whitepaper, The Carrier Perspective: 2026 Claims Insights.
This creates a high-stakes operating environment where we must be diligent about upholding exacting evidence-based standards, providing best-in-class customer service and ensuring all policies are meticulously designed and clearly communicated.
Insurers who can meet the uncompromising nature of these demands will be well-positioned to maintain profitability and preserve stakeholder trust, but doing so is proving increasingly difficult, especially as we face other pressing challenges such as rising claims costs.
As insurers expand delegated authority models and MGA partnerships, the challenge is no longer simply handling claims correctly but maintaining consistent oversight, accountability, and customer outcomes across a complex ecosystem of partners.
To explore this further, there are three ways a strategic claims and risk management partner like Gallagher Bassett can help insurers navigate the UK's rigorous regulatory landscape, and provide the confidence and control needed to maximise efficiency and drive sustainable growth.
Hardcoding Compliance and Customer Service Excellence Into Everyday Operations
A claims and risk management partner like Gallagher Bassett provides an invaluable layer of security by embedding structured workflows into day-to-day operations. This can track the FCA's core metrics including claims resolution timeframes, consistency across claims handling and satisfactory customer outcomes.
Tracking is particularly helpful as many insurers rely on MGAs and delegated claims arrangements, which creates additional oversight obligations. Strategic partners help insurers maintain visibility and control across delegated schemes. Consistent claims handling frameworks also help ensure delegated partners operate within agreed standards, and centralised monitoring creates a more defensible oversight model across multiple MGA relationships.
An experienced partner can also map customer friction points, devise a prompt solution before regulatory intervention, and provide frameworks that flag vulnerable customers, so they receive support that meets regulatory expectations. Additionally, we can help fill talent and expertise gaps to ensure claims are handled promptly, consistently, and with the empathy and clear communication demanded by the FCA. The ability to rapidly scale resourcing up and down through a flexible service like Gallagher Bassett's Burst Resourcing is vital to prevent a slip in standards during peak claims periods.
Tapping into an external top-tier talent pool also provides access to frontline claims handlers who undergo mandatory and continuous training in the FCA's Code of Conduct. This lowers the risk of breaches and reinforces standards for internal teams.
Breaking Down the Barriers to Technology To Streamline Claims Handling and Reporting
AI and advanced technology have an undisputed role to play in meeting the enhanced evidence-based obligations of today's regulatory environment, particularly those within the Consumer Duty, which require data-backed evidence proving actual fair consumer outcomes.
However, as our whitepaper, The Carrier Perspective: 2026 Claims Insights shows, insurers are wary of inviting regulatory scrutiny by deploying AI solutions that could upset the balance between innovation and consumer protection.
A claims and risk management partner can provide access to proven AI solutions that insurers can leverage for greater efficiency, consistency and quality handling across the claims lifecycle to deliver an operational advantage.
Additionally, centralised, audit-ready compliance dashboards that monitor outcomes and provide the FCA with the data-backed evidence it requires are a vital tool. They support insurers with reporting and empower granular data-based root-cause analysis, which is particularly important in the event of a 'super claim' or regulatory review.
Gallagher Bassett also helps insurers provide evidence of Consumer Duty outcomes across the entire distribution and claims chain, including MGA and delegated arrangements. This is key, because insurers remain accountable for customer outcomes even when activities are delegated to an MGA or third party. Standardised reporting allows insurers to compare outcomes across schemes and identify outliers, while audit-ready data helps demonstrate that oversight responsibilities have been actively discharged rather than merely delegated.
Nevertheless, access to technology alone cannot eliminate insurers' concerns about the Consumer Duty's sharpened focus on how automated processes influence decisions, fairness, and customer outcomes. Therefore, a partner's role should also offer the resources and expertise needed to support increased levels of human validation for AI-supported decisions, particularly when it comes to customer-facing use where every decision must remain auditable and defensible.
Supporting Sound Policy Design and Growth
A claims and risk management partner can also play a crucial role in avoiding regulatory scrutiny when it comes to developing new policies. It can bridge the gap between underwriting theory and actual customer outcomes to ensure policies meet strict regulatory standards before they go to market. For insurers operating multiple MGA schemes, consistent governance frameworks are critical to demonstrating fair value and superior customer outcomes.
From granular risk mapping, using extensive historical claims data like Gallagher Bassett's to sharpen a policy's focus and refine any exclusions, to leveraging predictive analytics to benchmark claims frequency and severity, the right partner can ensure a new policy has a clear market position and an accurate pricing structure that meets the FCA's strict requirements for value versus tangible benefits.
At Gallagher Bassett, our legal teams protect insurers from fines, litigation, and reputational damage. They leverage the commercial data and operational insights from our claims and risk management experts to develop contracts that balance clarity and protection and are both legally sound and regulator-approved. Claims data can also be used to benchmark performance across schemes and support more consistent product governance.
A claims and risk management partner should also bring specialty expertise and a strong understanding of the nuances in claims across different lines of coverage. This helps define the customer journey and embeds pre-tested claims workflows from the outset, removing friction points and establishing automated flags for vulnerable customers along the way to build the foundation for ongoing, seamless regulatory compliance.
Regulatory compliance is no longer just about managing individual claims correctly; it's about demonstrating effective oversight of delegated authority arrangements, providing evidence of Consumer Duty outcomes across the entire value chain, and maintaining consistent, defensible governance across multiple schemes. However, these regulatory requirements needn't be constraints to growth or deterrents to innovation. They should empower customer service excellence and result in standards and procedures that lead to superior outcomes.
To learn more about how Gallagher Bassett's claims management expertise, specialised legal and consultancy solutions, and suite of technology innovations can help you thrive in an increasingly regulated operational environment reach out today.
Make Gallagher Bassett your dependable partner
When making the right decision at the right time is critical to minimise risk for your business, count on Gallagher Bassett's extensive experience and global network to deliver.