How to Start an Insurance Company – What You Need

If you currently work in insurance and you want to start your own insurance company, in this post we’ll list the various things you’ll need in place before you can start legally trading.

What Sort of Insurance Company Do You Want to Start?

As we’ll see below, the UK insurance industry is highly competitive, and one way to stand out is through offering specialist insurance products for niche sectors.

But before you think about this, you need to decide whether you want to be an insurance broker, a Managing General Agent or an insurance underwriter.

  • Insurance Broker – This means you’ll liaise with customers, take the time to understand their needs, then work to find them cover that meets their budget. Though this requires you to understand deeply how insurance works, as the underwriting will be handled by other insurers, it’s a relatively straightforward role.
  • Insurance Underwriter – This means that you will insure clients directly, so your company will take on the insured risk. Because you’ll be taking greater financial risks, there are much stricter regulations in place for insurance underwriters compared to insurance brokers.
  • Managing General Agent (MGA) – MGAs are insurance brokers with underwriting authority, granted by the insurers they work with.

Do I Need to Register to Start an Insurance Company?

Whether you want to become a broker, an MGA or an underwriter, you’ll need to register with the Financial Conduct Authority (FCA).  Insurance companies also need to register with the Prudential Regulation Authority (PRA). We’ll cover the regulations in more detail below.

If you want to start your own insurance business there are a number of steps you’ll need to take

Understand The Market

If you already work in insurance, then you’ll no doubt already have some understanding of just how the industry works.

But if you work for an established insurance company, you might not realise just how competitive the insurance industry can be.

The UK insurance industry is the largest in Europe. It also happens to be the fourth largest in the world.

The Bank of England regulates at least 500 insurance companies. So if you’re thinking of starting your own insurance company, the first key thing to understand is that you’re entering a crowded marketplace.

How are you going to stand out from your competition? Well, you could invest heavily in marketing and work for years to build up a strong reputation. Or you could target niche clients through offering specialist insurance products.

Regulation and Accreditation You Need to Start an Insurance Company

As well as being highly competitive, the insurance industry is also one of the most heavily regulated in the world.

If you want to sell or arrange insurance in the UK – or even simply advise on it –  then you need a licence from the FCA. You also need to meet the regulations set out by the PRA.

So insurance firms are dual-regulated, and are obliged to follow client money and assets (CASS) rules as outlined in the FCA handbook.

You also need to follow the FCA’s Senior Managers and Certification Regime (SM&C). Among other things, this means that every senior manager in your firm must have a clearly outlined “statement of responsibilities”, specifying exactly what they are accountable for.

If you already work for an insurance company, then you might already be registered with the FCA as an insurance intermediary. But even if this is the case, you’ll have to start a completely new authorisation process to set up your own insurance business.

How to Apply for FCA and PRA Certification

It’s a two stage process:

  • Pre-Application – You’ll work closely with both the FCA and PRA to ensure you have everything you need to start your own insurance business. This will involve a number of face-to-face meetings, and you’ll have to submit certain documents, including your business plan and your capital management strategy.
  • Application – Following a satisfactory pre-application process, the FCA and PRA will advise you on the next steps in writing. They’ll tell you which forms you need to complete, and where you need to send them.

You should know whether your application’s successful within six months. Both the FCA and the PRA will make their decisions separately. Though the PRA makes the final decision, they will not authorise you without FCA consent. So you really do need to satisfy both regulatory bodies.

You can learn more about the application process for new insurance businesses here.

How Much Does it Cost to Set Up A New Insurance Business?

The total application fee for a new insurer authorisation is £25,000.

Also, every insurance business must hold a minimum amount of capital. The specific amount will vary depending on what type of insurance business you’re running.

You can learn more about capital requirements for insurance companies in the PRA Rulebook.

Now You’ll be Registered

So once you meet all of these regulations and complete all of these processes, you should be ready to start your own insurance business.

Of course, at this point your work will just be getting started. We have a few guides on our site to help you with some of the practical aspects of establishing a business:

We also offer bespoke insurance software solutions for insurance companies of all sizes, including tailored brokerage and end-to-end fulfilment software.

Head here to learn how our award-winning SAAS makes life easier for insurers, brokers, MGAs, agents and program providers.

If you have any questions, or you’d like to discuss your options, you can contact the Tapoly team at, call our info line on +44(0)207 846 0180, or use the chat box on our website.