Why London matters in ILS

One of the purposes of commissioning London Matters—the research report the London Market Group (LMG) published in November last year—was to attract the attention of government and regulators. For too long we felt that they had seen our market as just an extension of the UK insurance industry or the rest of the City.

In reality our products are significantly different from those of either of the two sectors, as is our predominant customer type. Moreover, our business—global specialty insurance—is among the most internationally mobile.

We wanted our report to highlight this—to demonstrate that here was a vibrant financial services sector contributing significantly to the economy, that needed some focused attention.

The reaction we have had shows that we have more than achieved this objective.

At the beginning of 2015, off the back of commitments made by the chancellor in his Autumn Statement, the LMG submitted a 22-page document setting out areas where government support could help develop the competitive position of the market.

It put forward a wide-ranging set of ideas on tax, regulation and access to overseas markets. Part of this was the suggestion that we could work together with government to try to attract more insurance-linked securities (ILS) business to London.

We are interested in ILS business because it is one area of our industry where innovation is happening. London’s role as the global centre of excellence for specialty insurance has been founded on our ability to invent—to find new ways of matching demand for and supply of capital.