The UK's Financial Conduct Authority (FCA) has launched new market study into wholesale insurance broking practices.

The study will assess how competition is working in the wholesale insurance broker sector. 

The watchdog will look at whether the sector fosters innovation and competition in the interests of its range of clients. 

In the recent years, there have been significant changes in the wholesale insurance sector, which has led brokers to develop new services and business practices.

The FCA is planning to explore what it the level of competition in the sector and whether or not it could be made better.

As per FCA, effective competition can ensure that London remains as one of the international centres for insurance, which controls more than £68bn in gross written premium.

In April, the UK insurance watchdog stated its plans to conduct a probe or market study in wholesale insurance market in its 2017-18 business plan.

FCA Strategy and Competition executive director Christopher Woolard said: “Given the size of the wholesale insurance sector and the type of large scale risks it covers, the way it functions can have a wide-ranging impact on the broader economy. 

“If businesses cannot get appropriate cover or pay more for services than they should, it can impact on their ability to operate and grow. 

“Brokers play an important part in the wholesale insurance sector ensuring clients get appropriate coverage at good value. However, following significant changes in the sector, we are looking at the dynamics to ensure competition is working well.”

The FCA also stated that it has published the terms of reference about the topics to be explored for the market study and is ready to receive responses from the industry until 19 January, 2018.

Image: FCA to start new market study on wholesale insurance sector. Photo: courtesy of FCA.