UK insurers could be given green light to invest in riskier assets without formal prior approval

Written by Adam Cadle

08/01/2025

The UK insurance sector could be given the green light to invest in riskier assets without formal prior approval, the Bank of England has said.

The BoE is planning a new mechanism, “a matching adjustment accelerator”, to ease processes for insurance companies, which need to make rapid investment decisions but often need authorisation before putting money into certain assets.

Speaking to members of the House of Lords financial services regulation committee, PRA head, Sam Woods, said: “So the idea is like a sandbox. They should be able to go ahead, come to us later for approval,” Woods said.

Woods insisted the PRA was not trying to usher in an era of light-touch regulation.

“I do think that we should avoid a race to the bottom, [but] I don’t think that that is what Parliament has asked us to do.”

Woods said it was an opportunity to review regulation that came into force after the 2008 financial crisis.

“We’ve built up all of this machinery over the last 10 or 15 years. Are there some places where it’s a bit overcooked? Are there some places where it’s a bit overlapping, some places where it’s a bit complex, where, if we were making that [decision] again with our new objective, we’d do it differently?

“And in many cases, the answer to that question will be ‘yes’. And that’s what we’re focused on.”

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