Caroline Wagstaff, CEO of the London Market Group, which represents the specialist insurance sector in the City, said that London’s portion of the worldwide insurance market has been “stagnant”, hovering around 8% in recent times.
London’s insurance market, centered around Lloyd’s of London, is facing challenges due to sluggish regulators and inadequate regulations, according to an industry estimate. The sector, known for insuring and reinsuring major and unconventional risks such as energy infrastructure and cyber threats, contributes nearly a quarter of the City’s economic output.
One of the main concerns highlighted by Wagstaff is the “one-size-fits-all” regulation that treats all insurance buyers equally, regardless of their complexity or sophistication.
Another issue is the slow pace of regulatory authorisations, which is a problem across the financial sector as a whole. Financial regulators often fail to meet statutory deadlines for processing applications and approving key executives within firms.
The London Market Group is urging regulators to provide a comparative analysis of the UK’s performance compared to other financial jurisdictions, including approval rates, application processing times, and rejection rates.
While efforts are being made to improve competitiveness, one area that remains a concern is the development of bespoke regulatory frameworks for captive insurance companies. Other jurisdictions have taken the lead in this regard, creating favourable conditions for self-insured risks within a group of companies. The UK government has promised further work in this area.
Despite the challenges, the London insurance market is generally in good health due to rising insurance costs. Lloyd’s, in particular, expects premiums to increase from nearly £47 billion in 2022 to £56 billion this year.
