Biba reveals impact of regulation costs on insurance premiums

Biba has revealed the impact of regulation costs in relation to insurance premiums paid by clients for the first time.

Data published today (1 May 2025) by the trade body showed that regulation costs amount to 5.2% of insurance premiums collected. 

This breaks down as 3.3% for insurance brokers and 1.9% for insurers, with costs being higher for brokers despite their lower systemic risk.

Biba felt these figures are ”further evidence of the disproportionate costs of regulation that insurance brokers face”.

Graeme Trudgill, chief executive at Biba, added: “The cost of regulation is too high. It is disproportion to the risk that brokers pose and now, not only can we demonstrate that it is expensive for brokers, but that high regulatory costs are impacting premiums by 5.2%.

“We strongly believe that the burden of regulation can be reduced and we are working closer than ever with the FCA on a number of opportunities to achieve change.”

2023 research

Biba commissioned London Economics to carry out the research, with it analysing the direct and indirect costs of regulation across both personal and commercial business.

The research builds on a study from 2023, which found that direct regulatory costs for brokers were 40% higher than in 2019 and overall direct and indirect costs were equal to 8.1% of insurance mediation fees and commissions.

Patrice Muller, senior partner at London Economics, said: “Our research highlights that a significant proportion of insurance company and broker costs – and, by extension, consumer premiums – can be attributed to the current regulatory framework.

”These findings point to a clear opportunity. By streamlining existing regulations and regulatory processes, there is the potential to deliver meaningful consumer benefits through lower premiums, while maintaining necessary protections.”