Every technology company we assess has a compliance gap. Not because they are negligent — most are GDPR-aware and take data security seriously — but because they have no idea what an insurer's compliance function will actually ask them, how long the process takes, or how many partnerships die in the space between "the underwriting team loves this" and "our information security team needs more documentation."
The compliance conversation is the one most technology companies defer until it's too late. They treat it as a box-ticking exercise that happens after commercial terms are agreed. In reality, it is the single most common reason that promising insurance partnerships stall — and the one that is most straightforward to prepare for, if you start early enough.
What insurers actually ask
When an insurer's compliance or information security team evaluates a potential technology partner, the review typically covers five areas. The questions are predictable. The fact that most technology companies are unprepared for them is the problem.
Data governance and ownership. Who owns the data your platform generates? If a fleet telematics provider collects driving behaviour data from an insurer's policyholder, who controls that data — the policyholder, the fleet operator, the technology company, or the insurer? What happens to the data if the partnership ends? Can the insurer retain the data, or does it revert to the technology company? These questions seem straightforward until you realise that many technology companies have never documented the answers.
Information security posture. The standard insurer third-party security questionnaire is extensive. It will ask about your encryption practices (at rest and in transit), access control mechanisms, vulnerability management, incident response procedures, business continuity planning, and penetration testing history. If you hold SOC 2 Type II or ISO 27001 certification, much of this is already documented. If you don't, you'll be asked to provide equivalent evidence — and the burden falls on you to assemble it.
GDPR and data processing. Any technology that processes personal data — driver behaviour, location data, health metrics, property occupancy — requires a clear legal basis under GDPR. The insurer will need to see your Data Processing Impact Assessment (DPIA), understand the lawful basis you rely on for processing (consent, legitimate interest, or contractual necessity), and review your data processing agreements. They will also want to understand data flows: where data is stored, whether it crosses borders, and what sub-processors are involved.
FCA fair pricing and Consumer Duty. This is the area that most technology companies miss entirely. The FCA's 2026 regulatory priorities make it explicit: insurers are expected to demonstrate that their pricing practices deliver fair outcomes for consumers, and the FCA will assess how AI and data-driven tools affect pricing fairness, transparency, and potential discrimination. If your technology feeds data into an insurer's pricing model, the insurer needs to satisfy itself — and the FCA — that the resulting pricing does not discriminate unfairly against protected groups. The FCA has announced it will evaluate the risks and barriers to AI adoption in insurance, specifically examining how the technology affects pricing fairness and dispute handling. A technology company that cannot explain how its data intersects with these requirements creates a regulatory risk for the insurer.
Operational resilience. Since the FCA and PRA's operational resilience framework took effect, insurers must demonstrate that their important business services can withstand disruption. If your technology becomes embedded in an insurer's underwriting or claims process, you become a dependency. The insurer will need to understand your service-level agreements, your disaster recovery capabilities, your redundancy architecture, and your incident communication protocols. The FCA's 2026 priorities explicitly state that effective management of outsourced partners is central to operational resilience.
Why partnerships die in compliance review
The typical pattern is depressingly predictable. A technology company has productive conversations with an insurer's innovation team. The underwriting team sees potential. A pilot is proposed. And then the project is handed to the insurer's procurement, legal, and information security functions — and it stalls.
It stalls not because the compliance team is obstructive, but because the technology company cannot provide the documentation that the compliance process requires. The security questionnaire arrives and the technology company takes three weeks to respond because they have to assemble answers from scratch. The data processing agreement requires terms the technology company hasn't contemplated. The FCA fair value assessment raises questions about data usage that nobody in the technology company has considered.
Each gap creates delay. Each delay erodes momentum. The internal champion who sponsored the partnership loses patience, gets reassigned, or runs out of budget. The pilot that was supposed to launch in Q2 slips to Q4, and by then the insurer's priorities have shifted.
Research from Pedersen & Partners confirms that cultural misalignment between insurtechs and traditional insurers — with insurtechs perceiving incumbents as slow-moving and incumbents viewing start-ups as operationally fragile — is a persistent friction point. The compliance process is where that friction manifests most acutely.
What to prepare before your first insurer conversation
The good news is that compliance readiness is one of the most fixable gaps. Most of the required documentation can be assembled in 2–4 weeks with focused effort. The certifications take longer — SOC 2 is a 3–6 month process — but having a credible plan and timeline is often sufficient for initial conversations.
1. Complete a Data Processing Impact Assessment for your insurance use case. This should cover the specific personal data you collect, the lawful basis for processing, data retention periods, data flows (including any cross-border transfers), sub-processors, and the rights of data subjects. Template DPIAs are available from the ICO, but yours should be specific to the insurance deployment, not generic.
2. Prepare a data ownership and exit policy. Document clearly who owns the data at each stage of the relationship. What happens to policyholder data if the partnership ends? Can the insurer retain derived insights? What are the deletion timelines? Addressing this upfront prevents protracted legal negotiation later.
3. Pre-complete a third-party security questionnaire. Most insurer security questionnaires follow similar structures. Download a standard TPRM questionnaire (many are based on the SIG or CAIQ frameworks) and complete it proactively. Have it ready to send within 24 hours of being asked. The speed of your response signals operational maturity.
4. Document your position on fair pricing. If your data feeds into pricing models, write a one-page position paper explaining how your data has been tested for proxy discrimination, what protected characteristics it could correlate with, and what controls are in place. The FCA's Consumer Duty requires insurers to evidence that products deliver fair outcomes — your documentation helps them do that.
5. Prepare an operational resilience summary. Document your SLAs, uptime history, disaster recovery procedures, incident response protocols, and communication escalation paths. If you have an existing status page or uptime monitoring, reference it.
6. Create a compliance roadmap if you lack certifications. If you don't yet hold SOC 2 or ISO 27001, prepare a documented plan with timelines. "We are targeting SOC 2 Type II certification by Q3 2026, with Gap Assessment completed and remediation underway" is a credible position. "We haven't started" is not.
The competitive advantage of compliance readiness
Here's the insight that most technology companies miss: compliance readiness is not a cost of doing business with insurers. It is a competitive advantage. The vast majority of your competitors will not have this documentation prepared. They will stumble through the compliance process, creating delays and frustration. You will move through it in weeks rather than months.
An insurer's procurement team processes dozens of technology vendor evaluations. The ones that pass through compliance smoothly get deployed. The ones that create friction get deprioritised. In a market where Gartner projects that 30% of AI projects are abandoned after proof of concept, the ability to survive the compliance stage is a genuine differentiator.
The compliance conversation is not the enemy of innovation. It is the gateway to commercial deployment. The technology companies that understand this — and prepare for it before their first insurer meeting — are the ones that convert.
Not sure where your compliance gaps are? Take the free Partnership Readiness Diagnostic → — our Integration & Compliance Readiness dimension will highlight exactly where to focus.