{"id":6027,"date":"2023-09-20T09:05:23","date_gmt":"2023-09-20T08:05:23","guid":{"rendered":"httpss:\/\/www.advantagego.com\/?p=6027"},"modified":"2025-02-25T15:36:44","modified_gmt":"2025-02-25T15:36:44","slug":"has-london-company-market-bounced-back-from-brexit-era","status":"publish","type":"post","link":"https:\/\/www.advantagego.com\/en-us\/content\/has-london-company-market-bounced-back-from-brexit-era\/","title":{"rendered":"Has the London Company Market Bounced Back from the Uncertainties of the Brexit\u00a0Era?"},"content":{"rendered":"\n

Scroll back only 18 months and the prognosis from certain quarters for the London Market post-Brexit was still a very gloomy one. No less august a body than Airmic, for example, (the UK association for risk and insurance professionals) said last spring that Brexit was threatening the London Market\u2019s influence in the global industry, as reported in the company\u2019s March 2022 Pulse Survey.<\/p>\n\n\n\n

One of the questions in the survey asked how had the influence of the UK insurance market<\/a> changed since Brexit. 5% of the participants said it has strengthened slightly, 15% said it has waned significantly, another 15% said it has waned slightly, and 65% said that it has not changed. In the report, the company said that London used to be the European Union\u2019s hub for financial services, but Brexit has now led insurers \u201cto shift-decision making powers\u201d back to their headquarters in other countries.<\/p>\n\n\n\n

Well, one supposes that while debate over how influential the London Market may be in the post-Brexit era will rumble on for some time, one fact is now indisputable: Brexit has in no way diminished premium income into the company market. Indeed, as the latest statistics from the International Underwriting Association<\/a> make abundantly clear, and as the organisation\u2019s CEO answers in this week\u2019s Big Question, the London company market is indeed thriving at present.<\/p>\n\n\n\n

Ian Summers, Global Business Leader, AdvantageGo<\/em><\/strong><\/p>\n\n\n\n

<\/div>\n\n\n\n

\u201cThis year\u2019s London Company Market Statistics Report reveals a big increase in premium income for the sector,\u201d says Matcham. \u201cResults from the International Underwriting Association\u2019s annual publication show firms wrote business worth \u00a344.071bn in 2022. The figure represents an increase of around one quarter on the previous year when an aggregate of \u00a335.654bn was recorded.\u201d<\/p>\n\n\n\n

The company market in London has been thriving, he adds: \u201cIt represents a unique community of insurers and reinsurers and is a significant contributor to the UK economy. Both total income and the number of member firms of the IUA, have roughly doubled over the past decade.\u201d<\/p>\n\n\n\n

\u201cMuch of the London company market\u2019s business is international and total growth has continued despite disruption and restructuring resulting from the UK\u2019s exit from the European Union. The sector\u2019s overall intellectual and economic premium is made up of business written in London and income written overseas, or in regional UK offices, but subject to oversight and management by London operations.\u201c<\/p>\n\n\n\n

\u201cA review of this latter \u2018controlled\u2019 premium shows income from continental Europe has fallen sharply post-Brexit. In 2016 such business for Europe, excluding the UK and Ireland, stood at \u00a32.306bn. For 2022 the figure was just \u00a31.141bn. The fall has been masked by growth elsewhere across a wide range of different business classes and geographies. But when considering the progress of the London company market, it is important to understand the market trends that have been driving premium changes.\u201d<\/p>\n\n\n\n

Firstly, he says, it must be noted that the IUA\u2019s survey of premium income does not include any claims data and, therefore, cannot be a measure of profitability of any individual classes of business.<\/p>\n\n\n\n

\u201cAs firms complete the data template for the IUA\u2019s survey of premium income, however, they are invited to submit an accompanying commentary explaining any changes to their business profile.\u201d He says. \u201cIt is clear from this year\u2019s comments that the driving force behind the premium growth of the last 12 months has been rising prices for existing business. Inflationary pressures were reported frequently in relation to property business, the sector\u2019s largest class, but also for professional lines, political risks and a number of other specialty lines. Prices rises are being driven by previous market losses and withdrawals of capacity.\u201d<\/p>\n\n\n\n

Rate increases are far from the entire story, however, as many companies have reported instances of new business being acquired by their London Market operations, Matcham suggests, with premium growth attributed to significant investments in underwriting talent in recent years with firms growing market teams in anticipation of hardening market conditions.<\/p>\n\n\n\n

\u201cThe importance of underwriting talent was underlined by a comment from one company attributing a doubling of their Asian premiums to a single senior employee transferring from the region to their London office,\u201d he adds.<\/p>\n\n\n\n

Favourable underwriting<\/a> conditions have not just been limited to pricing, Matcham says, with policy terms and conditions also been subject to renegotiation with an unbundling of composite structures, for example in policies previously combining marine, energy and political violence cover. Now these risks are each being placed on a stand-alone basis with appropriate pricing. This is particularly true for political violence which has been influenced by the war in Ukraine. Meanwhile, there continues to be a post-Covid bounce in certain areas, such as engineering and construction, where major projects previously delayed by lockdown restrictions are now underway.<\/p>\n\n\n\n

He says that other classes of business that were highlighted by IUA members as having experienced a particularly good year for premium income were aviation, energy, bank trade finance and infrastructure finance, directors and officers and public liability.<\/p>\n\n\n\n

\u201cFirms have sought to deploy their capital and underwriting resources into the lines of business that they deem most profitable,\u201d he says. \u201cSome have withdrawn from areas that they deem uneconomic, for example, motor treaty. \u201c<\/p>\n\n\n\n

\u201cFinally, it should also be noted that better data collection by the IUA has partly contributed to the reported rise in aggregate London company market premium. The association is constantly seeking to improve its engagement with members and as its understanding of underwriting operations expands, further business that can be defined as London Market premium is sometimes identified. There are five new companies whose premium was included for the first time this year and the total business accounted for by this group was \u00a30.972bn.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Scroll back only 18 months and the prognosis from certain quarters for the London Market post-Brexit was still a very gloomy one. No less august a body than Airmic, for example, (the UK association for risk and insurance professionals) said last spring that Brexit was threatening the London Market\u2019s influence in the global industry, as […]<\/p>\n","protected":false},"author":2,"featured_media":6028,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[7],"tags":[],"line-of-business":[],"class_list":["post-6027","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/6027","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/comments?post=6027"}],"version-history":[{"count":0,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/6027\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media\/6028"}],"wp:attachment":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media?parent=6027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/categories?post=6027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/tags?post=6027"},{"taxonomy":"line-of-business","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/line-of-business?post=6027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}