PwC welcomes UK ILS move; disappointed on insurance review feedback

Professional services firm PwC has welcomed the UK’s commitment to develop an insurance-linked securities (ILS) regime in the UK.

However, the firm said it has been disappointed with the lack of feedback on the broader competitiveness review relating to insurance that was announced in the Autumn Statement.

The plans for ILS were revealed by George Osborne, the UK Chancellor of the Exchequer, today (Wednesday March 18) in his final budget speech before the May election.

Colin Graham, UK insurance tax leader at PwC, said: "This is good news and a direct response to engagement with the industry in the last few months on global competitiveness from a regulatory and tax perspective.

“Despite this and the government's recognition of the UK as a 'world leader' in global insurance, it is disappointing not to hear any feedback on the broader competitiveness review that was announced in the autumn statement. The ILS announcement is very positive, but arguably does not go far enough.

In its autumn statement, the government said it would explore options to ensure that the UK’s regulatory and tax regime is as competitive as possible to attract more reinsurance business to the UK, with the interim findings being reported during the 2015 budget. Potentially, the lack of feedback could mean that this is the end of the government’s engagement in this area.

“We also wait to see the detail of the diverted profits tax that takes effect on April 1 to see whether government has listened to the industry's concerns in relation to its scope and associated concerns over complexity and global competitiveness."