The London Market Group (LMG) has today published research in an update to its 2014 London matters report, which reaffirms the London Market’s strength but also provides some unsettling evidence of where London is under intense pressure.
Starting with the positives, the research shows that London is maintaining its share in commercial insurance at 5.8% of global volumes – although it’s worth noting this is primarily because of growth in the UK and North America. London also performs well in the areas where we have traditionally been strong, in specialty risks for example, where our market share increased from 38% to 40% between 2013 and 2015. Meanwhile, the data suggests London is developing a vibrant market for cyber insurance – which is growing at roughly 75% per annum.
On the other hand though, the LMG research also shines a spotlight on areas where London is not performing as well as we would all like.
In all emerging market regions, for example, London’s market share has declined in absolute terms despite these regions enjoying strong growth at a global level. At the same time London continues to decline in reinsurance, from a 13.4% share of the global market in 2013 to 12.3% in 2015. Talent also remains a challenge. The data shows that the London market continues to struggle to attract and retain the under-30s, women and those born outside of the UK.
All of this underlines the fact that now is not the time to be complacent.
To overcome these challenges we need to redouble our efforts in some absolutely critical areas – most notably the work already underway as part of the London Market Target Operating Model (TOM). If we want London and the businesses based here to succeed in an increasingly competitive world, we need to make it an easier and more cost-effective place to do business. If we don’t, we run the risk of seeing London’s position steadily decline.
We must build on the progress made so far. 2016 was a big year for the TOM. Moves such as the Placing Platform Limited (PPL), the Central Services Refresh Programme (CSRP) and Delegated Authority (DA) were all positive steps that make London more accessible, more efficient and more relevant to the needs of our customers. But there’s still a lot of work to be done. I urge everyone to support the TOM and other initiatives like Inclusion@Lloyds to help simplify and modernise our market and maintain London’s position as THE global centre of specialist insurance and reinsurance.
9 May 2017