Q4 2025 - What Insurance Brokers Should Prioritise
Introduction
The Financial Conduct Authority (FCA) has entered the final quarter of 2025 with a sharper focus on enforcement, consumer protection, and operational resilience. For insurance brokers, these developments directly shape how you advise clients, structure policies, and maintain trust in a competitive market. This blog explores the most relevant FCA updates in Q4 2025 and highlights the actions brokers should take to stay compliant and credible.
Things to be aware of
Claims Handling: The Fallout from the Which? Super‑Complaint
In September 2025, consumer group Which? filed a super‑complaint against home and travel insurers, alleging poor claims handling and misleading sales practices. The FCA’s July 2025 claims‑handling review had already identified weaknesses, and Q4 is when the regulator has been acting on those findings.
For brokers, the implications are immediate:
Closer scrutiny of policy wording - Ambiguity or hidden exclusions will be challenged.
Evidence of fair outcomes - Brokers must demonstrate that claims processes are efficient, transparent, and customer‑centric.
Consumer Duty enforcement - The FCA is using this complaint as a test case for its broader Consumer Duty framework.
Action point: Review your claims‑related communications and ensure clients understand exactly how policies respond. For B2B brokers, this also means checking that corporate clients are not exposed to reputational risks from unclear cover.
Artificial Intelligence Oversight
AI is now embedded in underwriting, fraud detection, and claims triage. In Q4 2025, the FCA and PRA are tightening expectations around AI governance.
Key requirements:
Explainability - Automated decisions must be transparent and understandable.
Fairness - AI systems should not create discriminatory outcomes.
Board‑level accountability - Senior managers must take responsibility for AI use.
For brokers, this matters because many insurers are deploying AI tools that shape pricing and claims decisions. If you recommend or distribute products reliant on AI, you must be confident they meet FCA standards.
Action point: Audit your insurer partners’ AI practices and document how you ensure fairness and transparency in client recommendations.
Consumer Duty: Enforcement in Practice
The FCA’s Consumer Duty, introduced in 2023, is now being enforced with greater intensity. Toward the close of 2025, the regulator is focusing less on new rules and more on supervisory visits and thematic reviews.
For brokers this means:
Fair value assessments. Commissions and fees must be demonstrably fair.
Plain‑English communication. Policy documents and marketing must be clear and accessible.
Ongoing monitoring. Firms must test whether clients are achieving intended outcomes.
Action point: Embed Consumer Duty into your client engagement strategy. For B2B brokers, this is not just about retail customers — corporate clients expect transparency and value too.
Anti‑Money Laundering and Financial Crime
The FCA has highlighted weaknesses in AML compliance across financial services. As 2025 closes, enforcement intensity is rising.
For brokers, the priorities are:
Enhanced due diligence. Especially for complex corporate structures or high‑risk sectors.
Risk assessments. Regularly updated to reflect emerging threats.
Oversight of appointed representatives. Brokers must ensure ARs comply with AML obligations.
Action point: Strengthen AML frameworks and document oversight processes. For B2B brokers, this is critical when dealing with multinational clients or cross‑border placements.
Motor Finance Compensation Scheme
The FCA’s consultation on the Motor Finance Compensation Scheme has been extended to December 2025, with final rules expected in early 2026.
While primarily affecting motor finance firms, brokers involved in motor‑related insurance should monitor developments closely. The scheme could reshape compensation processes and create new obligations for intermediaries.
Action point: Track consultation outcomes and prepare to adjust motor insurance practices accordingly.
Enforcement Tone in Q4 2025
Unlike earlier quarters, Q4 has so far been less about new proposals and more about application of existing rules.
The FCA is focusing on:
Supervisory visits. Direct engagement with firms to test compliance.
Thematic reviews. Sector‑wide assessments of claims handling, AI use, and Consumer Duty.
Enforcement action. Targeting firms that fail to demonstrate compliance.
For brokers, this means the regulator is watching how rules are applied in practice, not just how they are written in manuals.
Practical Broker Checklist
✅ Review claims processes for clarity and fairness.
✅ Audit AI tools and insurer partners for compliance.
✅ Embed Consumer Duty into client engagement.
✅ Strengthen AML frameworks and oversight of ARs.
✅ Monitor motor finance consultation outcomes.
Still a Big Opportunity!
The FCA is shifting from consultation to enforcement (it had to come!), focusing on claims handling, AI governance, Consumer Duty etc. For brokers, these developments are not just regulatory hurdles — they are opportunities to demonstrate professionalism, transparency, and client‑centricity.
Act now!!
By acting now — auditing processes, strengthening controls, and embedding Consumer Duty principles — brokers can position themselves as trusted advisors in a more demanding regulatory environment. It must be about building stronger client relationships and securing long‑term success in a competitive market.
The Thread..
Insurance Support Solutions Ltd can provide specialist support to understand your customer base, to build strong client relationships, to save you time & expense, to respond & communicate whilst also using the output to continuously improve your customer experience, your team, and your business.
Ask us about what is involved, and we will work with you to provide a bespoke solution that gives you confidence and conviction to positively impact on the customer experience.
And Finally…
Why don’t Insurance brokers have gym memberships? ‘Because chasing and keeping up FCA updates gives them all the cardio they need’
