Future regulatory framework

The regulatory costs faced by UK insurance brokers was conducted by London Economics on behalf of BIBA in late 2019.

The most striking finding was that in small firms more than one in every four (26%) full time equivalent staff are employed to attend to regulatory requirements.

The research also showed that 71% of respondents to the survey believed that the indirect regulatory costs had increased compared to 2016, with 21% of respondents indicating that indirect costs had increased by more than 25%.

The analysis also showed that direct regulatory costs borne by insurance brokers (combined sizes) in the UK are among the highest of all the 23 jurisdictions examined, ranking third. The direct costs for small firms had also increased since 2016.

Medium and large firms also face high costs of direct regulation.

 The research found that the UK was the second most costly among all 23 jurisdictions researched; far more expensive than key competitors such as France, Germany, New York or Japan. In fact, direct regulatory costs in the UK are two times (small firms) to five times (large firms) higher than the direct regulatory costs averaged across all other jurisdictions covered in this study.


– Direct regulatory costs include all the fees and levies insurance brokers have to pay annually as a condition to be authorised to undertake insurance intermediation/distribution activities. In some cases, both the insurance broker firm (a legal person) and the employees of the firm are subject to compulsory fees and levies.

– Indirect regulatory costs include the expenses incurred by insurance brokers in complying with the regulations and other requirements of the relevant authorities. Such indirect regulatory costs include the costs of resources dedicated to:

  • complying with the relevant legislative and regulatory framework;
  • meeting the various reporting requirements;
  • preparing for visits from the regulator;
  • etc.

“Smaller insurance brokers help protect the millions of SMEs across the UK from financial shocks.  However, these vital local services are being dangerously squeezed by disproportionate regulation that is mapped over from a far higher risk financial services sector by the FCA.  All we want is appropriate and proportionate regulation so we can focus more on client needs.”


Managing Director, Mason Owen and

Chair BIBA Smaller Brokers’ Advisory Board

BIBA welcomes the Her Majesty’s Treasury (HMT) consultation document ‘Financial Services Future Regulatory Framework Review’ which states that “many of the key regulatory reforms introduced following the financial crisis are now in place” and “now is the right time for the UK to begin to take stock”.

The Conservative manifesto states:
“Through the Red Tape Challenge, they will ensure that regulation is sensible and proportionate, and that the needs of small businesses are considered when devising new rules”.

In late 2019 key Government Ministers said:

Prime Minister:
“We are going to take advantage of Brexit and ease the burden of regulation”.

Business Secretary:
“We need to improve our problem with red-tape and regulation is making life difficult”.


“The Government will launch a ‘Brexit Red Tape Challenge’ to help identify EU regulations which the UK would benefit from removing or improving”. And once outside the EU, the UK will be able to “pursue a genuine independent trade policy” and will have the opportunity to “design smarter regulation”.

Small Business Minister: 

“We will look at burdensome regulation” 

BIBA supports the comments made by these Ministers. In response to the Government consultation we called for less but more effective regulation. 



For Government Ministers to turn their comments about the burden of regulation into actions, and to reinvigorate the Government’s Insurance Growth Action Plan.

BIBA has more than 1,800 individually FCA regulated firms registered as members. 

With more than 600,000+ enquiries through our
Find Insurance services in the last year.