{"id":6893,"date":"2024-07-29T11:06:03","date_gmt":"2024-07-29T10:06:03","guid":{"rendered":""},"modified":"2025-04-22T04:48:51","modified_gmt":"2025-04-22T04:48:51","slug":"is-the-london-market-maintaining-its-role-as-a-global-leader","status":"publish","type":"post","link":"https:\/\/www.advantagego.com\/en-us\/content\/is-the-london-market-maintaining-its-role-as-a-global-leader\/","title":{"rendered":"The Big Question: Is the London Market maintaining its role as a global leader?"},"content":{"rendered":"\n

London remains the global centre for the risk and insurance industry. It has a long history of innovation and expertise and boasts a concentration of talent that cannot be found in rival centres.<\/em><\/p>\n\n\n\n

Times are changing and the market is looking to change with them. The growth of regional markets such as Singapore has challenged the market\u2019s efforts to continue growth.<\/em><\/p>\n\n\n\n

Recently the 2024 edition of the London Market Group\u2019s London Matters research was published and the statistics were clear.<\/em><\/p>\n\n\n\n

The London Market employs 60,000 people and contributes nearly \u00a350 billion to the UK economy \u2013 2% of GDP overall, an increase of 26% on 2020.<\/em><\/p>\n\n\n\n

It is the world\u2019s largest specialty insurance market \u2013 nearly twice as large as its nearest competitor and earns $160 billion in income every year. Almost three quarters of that figure is from overseas, making it a key driver of foreign earnings to the UK economy.<\/em><\/p>\n\n\n\n

The London Market has maintained its overall share of the global (re)insurance market, the figure of 7.6% in 2020 had increased slightly to 8.3% in 2022.<\/em><\/p>\n\n\n\n

However, there are also areas of concern. The report found between 2020 and 2022, the London Market grew by 32%. In the same period, Bermuda saw growth of 39%. As the hard market continued the captive insurance sector is expected to reach $161 billion by 2030 \u2013 but the UK currently sees none of this business.<\/em><\/p>\n\n\n\n

When it comes to those who work in the market although the 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 also as many people over 50 as under 30 working in the market.<\/em><\/p>\n\n\n\n

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

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

It is a mixed bag but London International Insurance Brokers\u2019 Association (LIIBA) CEO Christopher Croft says the London Market finds itself in a good position.<\/p>\n\n\n\n

\u201cThere has been a hard market for some time and for brokers it is profitable given that they are paid a commission which is a percentage of the premiums charged,\u201d he adds. \u201cThere remain challenges, one of which is that we are still looking to formalise the post Covid trading environment. Brokers are still seeing less opportunities for face to face meetings with the underwriters.<\/p>\n\n\n\n

Geopolitical risks continue to impact the market adds Croft.<\/p>\n\n\n\n

\u201cThe industry is global and as we have seen geopolitical risks are seeing greater protectionism and the outcome of the US presidential election in November may have an impact on its trading outlook. We are also seeing that protectionism increase in the European Union and access to clients remain important to the market. The hope is that with a new government in the UK there will be steps taken to ease the issues of access and trade.\u201d<\/p>\n\n\n\n

Croft reveals that he has written to new chancellor Rachel Reeves. \u201cIt is the first time in many years I have done so,\u201d he adds. \u201cWe are hopeful that the new government will be open to working with us to meet some of those challenges.\u201d<\/p>\n\n\n\n

Cyber remains an issue for the business community and London\u2019s reputation as a home for innovation puts additional pressure on the market to lead in the creation and delivery of solutions.<\/p>\n\n\n\n

\u201cThere is a need to create a balanced credible cyber market,\u201d Croft explains. \u201cThis includes the need to ensure that we are not excluding risks and we have a solid understanding of the exposure underwriters are willing to take.<\/p>\n\n\n\n

\u201cUnderwriters have to understand that when it comes to cyber, they have to cover something. As brokers we feel some current wordings do not work. If we do not create a credible cyber market then it will be a failure for the industry.\u201d<\/p>\n\n\n\n

Croft adds climate change creates challenges but also real opportunity for the industry and LIIBA\u2019s membership, as governments and businesses look to the transition to net zero.<\/p>\n\n\n\n

\u201cOur members are often risk managers for their clients,\u201d he adds. \u201cThey are there to support clients building resilience, understanding the risks that climate change brings, and working to find the appropriate insurance solutions.\u201d<\/p>\n\n\n\n

He adds that Oliver Wyman estimates approximately $50 trillion in incremental investments is required by 2050 to transition the global economy to net-zero emissions and avert a climate catastrophe.<\/p>\n\n\n\n

Much of the emissions abatement pre-2030 will be driven by existing technologies (e.g. solar), but post-2030 abatement relies on breakthrough technologies, such as energy efficiency solutions, hydrogen-based fuels, bioenergy and carbon capture\/utilisation\/storage solutions, among others.<\/p>\n\n\n\n

\u201cAs an industry this is a real opportunity. We should be able to make money out of climate change and we should not be afraid to say so.\u201d<\/p>\n\n\n\n

Like every part of the industry the London Market is locked in a battle to attract talented individuals.<\/p>\n\n\n\n

\u201cThere is a focus on the need to attract talent into the sector and in the case of LIIBA we have a partnership with the Up Reach charity in which we sponsor 40 university students to make their way through university,\u201d Croft explains. \u201cIt is the third year of the partnership and some of those who have graduated under the scheme have gone on to get jobs within the market.\u201d<\/p>\n\n\n\n

The association also works with the Prince\u2019s Trust and works to ensure that we can source jobs for 50% of the cohort that come though each year. Not only does LIIBA look to source the opportunities but will provide support as they continue on their career.<\/p>\n\n\n\n

\u201cIn all 80% of our membership are firms with 50 or fewer people. They will be asked by the regulators what initiatives they have in place to encourage talent. When the FCA looks at our bigger members they can clearly see what they are doing internally around talent and what they are doing in the wider market. Our smaller members can point to the work LIIBA is doing and the support for those partnerships.\u201d<\/p>\n\n\n\n

The market\u2019s efforts to modernise the way it operates continue, but the delay to the implementation of phase one of the Blueprint II<\/a> until early 2025 does not reduce its benefit to the market.<\/p>\n\n\n\n

\u201cIt is the right thing to do,\u201d explains Croft. \u201cIt has to happen.<\/p>\n\n\n\n

\u201cIt is important we get it right. The system needs to work. If we move over too early and the system sends the wrong amounts to the wrong people in terms of premium or claims payments it would be disastrous.<\/p>\n\n\n\n

\u201cThe decision to delay did not come as a shock. The market has survived for over 300 years without Blueprint II and it can survive another six months.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

London remains the global centre for the risk and insurance industry. It has a long history of innovation and expertise and boasts a concentration of talent that cannot be found in rival centres. Times are changing and the market is looking to change with them. The growth of regional markets such as Singapore has challenged […]<\/p>\n","protected":false},"author":2,"featured_media":6894,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[7,26],"tags":[38],"line-of-business":[],"class_list":["post-6893","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blogs","category-latest-insights","tag-technical-vision"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/6893","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=6893"}],"version-history":[{"count":0,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/posts\/6893\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media\/6894"}],"wp:attachment":[{"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/media?parent=6893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/categories?post=6893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/tags?post=6893"},{"taxonomy":"line-of-business","embeddable":true,"href":"https:\/\/www.advantagego.com\/en-us\/wp-json\/wp\/v2\/line-of-business?post=6893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}