UK regulators underscore moment of reckoning for AI
Published 23 June 2025
Introduction
Artificial Intelligence (“AI”) is no longer an emerging tool, it is a transformative force reshaping the insurance industry. In the UK, insurers are moving beyond experimentation, embedding AI into core functions such as underwriting, claims processing, customer service, and complaint resolution. These advancements are unlocking significant gains in efficiency, accuracy, and customer satisfaction.
However, this promise is accompanied by responsibility and a chorus of regulatory caution. The Financial Conduct Authority (“FCA”), Prudential Regulation Authority (“PRA”), and the UK government, alongside global regulators such as the European Union (“EU”) Commission and U.S. Federal Trade Commission (“FTC”), have highlighted critical risks such as algorithmic bias, opacity in decision-making, and consumer protection vulnerabilities in the unregulated use of AI.
This white paper explores how UK insurers are innovating with AI while navigating an evolving regulatory landscape whilst calling for a balanced, forward-looking approach that combines innovation with accountability.
