Unlock the Editor’s Digest for free: London’s Insurance Industry Falling Behind in In-House Market
Are you interested in staying ahead of the curve in the insurance industry? Do you want to know what the experts are saying about the future of insurance and reinsurance markets? Look no further than the Editor’s Digest, curated by Roula Khalaf, Editor of the Financial Times.
In a recent issue of the Editor’s Digest, senior insurance industry executives discussed the growing trend of in-house insurance, where companies are setting up their own entities to cover corporate risks. This shift in the market has raised concerns about London falling behind other, more innovative centers such as Bermuda and Singapore.
David Howden, founder and CEO of insurance broker Howden, emphasized the need for the market to be “smarter” about innovating in response to the rise of captive insurers. Caroline Wagstaff, CEO of the London Market Group, echoed this sentiment, warning that London can’t afford to be complacent about its leading market share in specialist insurance and reinsurance.
The UK government has plans for new regulations to encourage captive insurers, but delays in implementation have left the industry in a state of uncertainty. Companies that work with brokers to set up captive insurance arms can benefit from lower premiums and investment returns, but also face increased exposure to risks.
Despite London’s traditional strength and stability in the insurance market, it has been criticized for lagging behind in innovation. New products such as insurance-linked securities and captive insurance have propelled rival centers like Bermuda and Singapore to faster growth since 2014.
In a statement, Lloyd’s of London acknowledged the growing interest in captives from multinational groups and announced a new captive syndicate with a global client. The recent rise in reinsurance prices, particularly for property catastrophe cover, has also contributed to London’s market growth.
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