General Insurance Article - The London Market grows contribution to economy to GBP50 bn

The London market employs 60,000 people and contributes nearly £50bn to the UK economy – 2% of GDP overall, an increase of 26% on 2020. To put £50bn into context it is the equivalent of paying the (annual) salaries of all NHS nurses and midwives in the UK three times over.

 It is the world’s largest specialty insurance market – nearly twice as large as its nearest competitor and earns $160 bn in income every year.

 Almost three quarters of that is from overseas, making it a key driver of foreign earnings to the UK economy.

 The London Market has maintained its overall share of the global (re)insurance market - 7.6% in 2020 increased slightly to 8.3% in 2022.

 The London Market Group, the trade body for the specialist commercial (re)insurance industry in London, has published the 2024 edition of its London Matters research. This is the 5th edition of the study and is based on data prepared by Strategy&, a part of the PwC network, and which reviews the size and performance of the London insurance market and gives insight on the key issues that it faces today.

 Sean McGovern, Chair of the London Market Group, commented “Although the London Market remains the largest hub of direct insurance and reinsurance when compared to other centres, its rate of growth has been slower than some of its key competitors and over the last decade its market share has remained broadly stagnant. So, we cannot take our place in the world for granted.

 “London has historically been a hub of innovation, developing market-leading solutions in areas like cyber. As domestic markets develop their own solutions, however, business tends to migrate from London. To maintain its status, London needs to continue to drive new product innovation in areas like green technology and to ensure it can offer the full range of risk transfer tools.”

 “To continue to punch above our weight there is an urgent need to create a regulatory environment that facilitates UK domiciled captives, demonstrating both at home and abroad that the market can respond swiftly and effectively”.

 The London Market’s position cannot be taken for granted
 • Between 2020 and 2022, the London Market grew by 32%. In the same period, Bermuda saw growth of 39%.
 • The market for captive insurance is expected to reach US$161 billion by 2030 – but the UK currently see none of this business.

 Talent and skills shortages
 Key facts about the speciality insurance workforce from the research.

 • Although headcount increased by over 40% in the period 2021-2023, over the past decade the London Market workforce has only grown at c.2% per year, well below the premium growth average of c.7%.
 • There are as many people over 50 as under 30 (24% in each age group).
 • This compares unfavourably with the financial services average which has 18% of the workforce over 50 and 23% under 30

 Caroline Wagstaff, CEO of the London Market Group, said: “The concentration of talent in the London Market is one of its USPs. The intellectual capital and wealth of experience in risk mitigation and transfer amongst London Market businesses means that London provides technical expertise and experience that it is hard to replicate anywhere else.”

 “If London is to remain the place where the world brings its risks, we need to take action at both a firm and market level to make specialty insurance a destination career for young people, delivering the diverse thinking that allows us to deliver solutions to current and future challenges.”

 London Matters 2024 Full Report

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