FCA Regulatory Priorities for the Insurance Sector: Focus for 2026

In February 2026, the FCA published its first Regulatory Priorities: Insurance report, the inaugural sectorspecific publication in a new series designed to replace the historical portfolio letters with a clearer and more consolidated view of supervisory and policy expectations. The Insurance report sets out the regulator’s priorities for insurers, intermediaries, price comparison websites, life insurers, wholesale insurers and funeral plan providers for 2026. The report aligns closely with the FCA’s broader 2025-2030 strategy: to be a smarter, more purposeful and proportionate regulator, focusing on outcomes, efficient engagement, riskbased supervision, and support for competition and innovation.

Four Key Regulatory Priorities in 2026

Improving Consumer Understanding, Claims Handling and Service Quality

A central theme of the insurance priorities report is the FCA’s ongoing focus on consumer outcomes, particularly at the point of claim. The regulator emphasises that too many consumers experience poor outcomes when making insurance claims, and expects firms to:

Ensure clarity in communications, so consumers understand what their insurance covers.
Comply with the Consumer Duty, especially in the context of claims and customer interactions.
Respond to claims fairly, promptly and transparently.
Monitor whether products and services deliver promised outcomes.

The report reflects the FCA’s continued supervisory and enforcement focus following the Which? supercomplaint on claims handling, including ongoing reviews of home, travel and motor claims handling practices.

Increasing Access to Insurance

Access to insurance is identified as both a consumer protection and financial inclusion priority. The FCA highlights that some vulnerable groups remain underserved, leaving them without essential financial protection. The regulator’s agenda includes:

Collaboration with industry and consumer groups to expand uptake of home contents insurance for social renters.
Focus on fair underwriting decisions in areas such as travel insurance for consumers with preexisting conditions.
Continued monitoring of affordability and fair value in key markets such as premium finance and protection products.

Supporting Growth and Innovation

The FCA explicitly positions its insurance priorities within a growthoriented framework. It wants to ensure that regulation enables sustainable innovation, noting that:

Insurers should confidently adopt new technologies (including AI), provided they embed strong governance and monitor outcomes.
The regulator will support testing and innovation through platforms such as the AI Lab and other engagement tools.
Work will continue to explore coverage gaps, including cyber insurance and emerging risk areas.

This approach reflects the FCA’s intent to balance consumer protection with competitive market development and diversification of the UK insurance sector.

Simplifying Regulation

Simplification of the regulatory framework remains an important priority. The FCA will:

Continue its work on streamlining insurance rules, including further engagement on proposals to reduce complexity, reporting burdens and unnecessary requirements.
Review regulatory returns to ensure data collection is efficient and proportionate.
Progress consultations that include potential changes to the Consumer Duty requirements and international application of rules.

Simplification aims to give firms clarity and predictability while preserving appropriate consumer protections.

Other Areas of Focus

In addition to the four core priorities, the report outlines ongoing workstreams and supervisory reviews that firms should be aware of, including:

Review of closed book life insurance products to assess delivery of good outcomes under the Consumer Duty.
Engagement with larger insurers regarding financial crime systems and controls.
Postimplementation review of certain insurance obligations and processes to assess effectiveness.

Practical Implications for Firms

The 2026 Insurance Priorities report provides a roadmap of regulatory focus that boards and senior leadership teams should integrate into their risk and compliance planning. Key practical takeaways include:

Governance and oversight of customer outcomes, particularly in claims and communications, must be robust and demonstrable.
Consumer Duty compliance should be clearly evidenced through MI, testing and product governance.
Access and inclusion strategies will increasingly form part of supervisory dialogue and expectations.
Innovation initiatives, especially involving AI and advanced data analytics, require proportionate risk controls and outcome monitoring to satisfy regulatory scrutiny.
Regulatory simplification presents opportunities to streamline internal processes and reduce unnecessary compliance burden where appropriate.

Conclusion

The FCA’s Regulatory Priorities: Insurance report marks a significant evolution in sector communication and engagement, consolidating supervisory expectations into a structured set of priorities for 2026. Firms should read the report as more than a compliance checklist: it provides insight into the regulator’s forwardlooking strategy, emphasising consumer outcomes, fair access, innovation and regulatory clarity. Effective planning against these priorities will be essential for firms seeking to demonstrate compliance, manage regulatory risk and maintain competitive positioning in a rapidly evolving market.

How Complyport can help?

At Complyport, we help insurance firms navigate evolving regulatory and compliance landscapes, translating complex requirements into practical, actionable solutions. Our support is designed to ensure firms are prepared, accountable, and aligned with the FCA’s 2026 Insurance Regulatory Priorities.

Compliance Readiness: We assist organisations in assessing current practices against the FCA’s updated expectations, including Consumer Duty compliance, claims handling, and access to insurance initiatives. This includes identifying gaps, prioritising actions, and preparing board-level briefings or management reports that demonstrate proactive oversight and transparency.
Governance and Accountability: We help define roles and responsibilities across senior management and key functions to ensure clear accountability for consumer outcomes, innovation oversight, and regulatory simplification. This supports effective decision-making, monitoring of claims processes, and demonstrates alignment with FCA expectations.
Innovation and Risk Oversight: We support firms in implementing new technologies, including AI and data analytics, ensuring innovation is coupled with proportionate risk controls and outcome monitoring. This helps insurers adopt emerging solutions while satisfying regulatory scrutiny.
Consumer Protection and Inclusion: We help firms enhance product accessibility, assess affordability and fair value, and embed inclusion strategies. This ensures vulnerable or underserved groups receive fair treatment while meeting supervisory expectations.