PRA outlines initiatives to boost UK insurance competitiveness and attract investment

Written by Adam Cadle

27/09/2024

The PRA’s director of insurance supervision, Shoib Khan, has highlighted a series of new initiatives designed to maintain trust in the prudential framework while facilitating the UK’s economic growth through the insurance sector.

The regulator’s Secondary Competitiveness and Growth Objective (SCGO) sits alongside the PRA’s existing secondary competition objective and requires it to discharge its general functions to advance its primary objectives, in a way that facilitates competitiveness and growth of the UK economy. In a speech at the Bank of America Securities Annual Financials CEO Conference, Khan said the PRA looks to facilitate the UK’s international competitiveness and advance the SCGO through three regulatory foundations:

- Maintaining trust in the UK prudential framework;
- Adopting effective regulatory processes and engagement;
- Taking a responsive approach to UK risks, opportunities, and innovation.

“These, in turn, can enable insurers to allocate capital more efficiently, compete in international markets; and attract investment to the UK,” he explained.

“We think that when you transact in the UK, our robust legal and regulatory framework means that policyholders should be confident that they can enforce their claims, and that insurers will have the means to pay. And that’s why the SCGO supplements our primary objectives of safety and soundness and policyholder protection. It’s worth noting that the SCGO applies when we exercise our general functions – in other words, our policymaking and supervisory approach. It does not apply to individual firm decisions. That being said, as we evolve our approach and respond to innovation, we will take into account what firms tell us about how we are impacting competitiveness and growth.”

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