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Aipedia: Insurance brokers
UK insurance brokers can use AI under existing FCA rules, but the firm stays responsible for every outcome, whoever built the tool. That matters because broking errors become E&O claims, and MIPRU 3.2 makes PI cover compulsory.
Part of: AI in insurance brokers
In short
There are no AI-specific FCA rules for brokers. The FCA applies its existing framework: the Principles, Consumer Duty, SM&CR, SYSC outsourcing and record-keeping rules, and ICOBS. Its October 2026 good practice page says firms can outsource AI services but remain responsible for them. The CII Digital Ethics Companion and the BIBA AI guide add professional and trade guidance. For PI, a broker's policy must meet MIPRU 3.2 minimum terms, but the FCA has said nothing specific about AI, so how a claim caused by an AI tool responds depends on the wording.
AI now appears at almost every stage of a broking file. Client-facing tools run fact-finds and question sets, prefill property, vehicle and business data, and answer cover questions through chatbots. Behind the scenes, brokers use AI to compare policy wordings, draft market submissions, triage risks to markets, run bulk renewal invitations, transcribe and quality-check calls, take first notification of loss and write marketing copy. Some brokers and MGAs price or underwrite risks using algorithms under delegated authority.
The financial services sector is a heavy user. The Bank of England and FCA 2024 survey found 75% of firms were already using AI, with the insurance sector at 95%. It reported that 55% of use cases involved some automated decision-making and about one third were third-party implementations. For a broker, that last point matters: much of the AI in use is supplied by software houses, platforms or insurers rather than built in-house.
The FCA has not written separate AI rules. Its AI Update of 22 April 2024 maps AI to existing requirements, including Principles 2, 3, 6, 7, 8 and 9, the Consumer Duty in PRIN 2A, SYSC 4, 7, 8 and 15A, SM&CR and complaints handling in DISP 1. Its page AI and the FCA: our approach (8 September 2025, updated 2 October 2026) confirms there will be no extra AI regulations and that the Consumer Duty and SM&CR are the main frameworks.
On 19 October 2026 the FCA published AI in financial services: good practice and areas for improvement. It creates no new requirements, but it is the clearest statement yet of what supervisors expect: map AI responsibilities to senior management functions, assign ownership by use case, keep auditable decision records, avoid inflexible automated journeys and map AI dependencies for operational resilience. It states that firms can outsource AI services but remain responsible for them, which mirrors SYSC 8.1.6R. The FCA AI guidance explainer covers each publication in detail.
The CII's Digital Ethics Companion (October 2021) is supplementary guidance on applying the CII Code of Ethics to digital work. It is not part of the Code and is not described as mandatory, but it asks members to consider ethics from the start of a project, to ask whether they should do something and not just whether they could, to judge fairness from each customer's perspective and to test data suppliers' compliance claims.
BIBA published an AI guide for members in 2025 explaining where AI can be used in broking and the regulatory, legal and compliance considerations, and noting that AI is not "a panacea for serving customers". In January 2026 it announced an AI Academy to help brokers become "AI confident".
Client data adds another layer. The Data (Use and Access) Act 2025 inserted Articles 22A to 22D into UK GDPR, fully in force from 5 February 2026, with safeguards for solely automated significant decisions and restrictions on special category data. The ICO guidance on AI explains how to apply them.
Most of these end the same way: the client suffers an uninsured loss and alleges the broker was negligent. No FCA enforcement action about a broker's use of AI has been found, and the Financial Ombudsman Service said in April 2026 it had seen very few complaints about firms' use of AI so far. It also said it wants firms to give a clear rationale for how AI shaped an outcome.
PI is compulsory for insurance intermediaries under MIPRU 3.2.1R. The minimum limits in MIPRU 3.2.7R are EUR 1,300,380 for a single claim and, in aggregate, the higher of EUR 1,924,560 or 10% of annual income, capped at £30 million. MIPRU 3.2.4R requires cover for the conduct of the firm, its employees and appointed representatives, legal defence costs, continuous cover from the date of Part 4A permission and Ombudsman awards. Excess limits apply under MIPRU 3.2.11R and 3.2.12R.
The FCA has made no statement on AI and broker PI. A broker E&O policy is usually written around negligent acts, errors or omissions in the conduct of the business, and an error made with an AI tool will commonly be treated like any other professional error, subject to the policy terms and any AI exclusion or condition. Insurers may ask about AI use at renewal, so describing it accurately is part of a fair presentation of the broker's own risk. See the insurance brokers PI guide for the wider picture.
No. The FCA has said it will not create extra AI regulations. It applies existing rules, chiefly the Consumer Duty, SM&CR, SYSC outsourcing and records rules and ICOBS, and its October 2026 good practice page shows how it expects firms to apply them to AI.
Yes, as far as the regulator is concerned. SYSC 8.1.6R keeps the firm fully responsible for outsourced functions, and the FCA's October 2026 page states that firms can outsource AI services but remain responsible for them. Contract terms with the supplier may allow some recovery, but they do not move the regulatory duty.
Often it will, because broker E&O cover is usually written around errors in the conduct of the business rather than the tool used. The answer depends on the wording, including any AI exclusions, conditions or definitions, so check the policy and tell insurers how you use AI at renewal.
MIPRU 3.2.7R sets EUR 1,300,380 for a single claim and, in aggregate, the higher of EUR 1,924,560 or 10% of annual income, capped at £30 million. Policies in sterling must remain equivalent at inception and each renewal under MIPRU 3.2.8R.
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Start a PI quote Request a callbackApex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.
