The overall premium income in the London Company Market in 2015 was £21.6 billion, however £7.3 billion of premium currently written in the city could be affected by Brexit, according to a report from the International Underwriting Association (IUA).
Gross premium written in London totalled approximately £15.2 billion, while a further £6.5 billion was identified as written in other locations, but overseen by London operations.
The report suggests that regulatory changes from the UK’s withdrawal from the EU could potentially impact £7.3 billion of current premiums written in London, due to an expected change in rules governing UK participation in the EU single market and its financial services passporting regime.
This suggested figure includes £1.4 billion of European premium written in London by firms which are either headquartered in the UK or have a parent company headquartered in a third country and are using their London office to access EU business.
In addition, there is a further approximate £6 billion of international business written in London by firms with a parent company or principle European base located elsewhere in the EU.
Dave Matcham, chief executive of the IUA, said: “Our statistics report this year clearly highlights the importance of an open trading relationship between the London Market and Europe. It is vital that a level playing field is maintained, so that companies can operate freely without any need for local licences, regulatory collateral obligations or other special requirements.
“The arrangement must be reciprocal. There are, of course, many firms that rely on London’s existing access to the single market to freely write a great deal of business covering clients and risk across continental Europe.
“At the same time, however, UK membership of the EU also enables many other overseas companies to write, via branch offices, risks that flow to London from across the globe. It is the concentration of all this expertise that makes the London Market a unique international insurance and reinsurance hub.”
Compared to 2014, the overall premium income for the London Company Market dropped 3.5 percent.
IUA attributed this decline in income to competitive market pressures, increased use of Lloyd’s platforms, company reorganisations and exchange rate fluctuations.
Although allocation of income between different business classes is relatively stable, marine had dropped from the second to third largest class being overtaken by liability.
Property remains the single largest sector accounting for 27 percent of premium written in London, according to the report.
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International Underwriting Association, London Company Market, Brexit, London, UK, Europe