UK government seeks to attract reinsurers

The UK government is set to undertake a review of the UK’s regulatory and tax regime to ensure it will attract more reinsurance business to the UK.

In the Treasury’s autumn statement, UK Chancellor of the Exchequer George Osborne, said: “Building on the UK’s position as a world leader in the global insurance market, the government will 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. This work will report interim findings at Budget 2015.

Dave Matcham, chief executive of the International Underwriting Association, said: “It was heartening to see reinsurance recognised in the Autumn Statement. The IUA fully supports the Chancellor’s aim to attract more such business to the London market and looks forward to contributing to this debate.

“The recent London Market Group report highlighted a number of opportunities for the London market to strengthen its position in the global insurance and reinsurance industry. An important part of the response will be to ensure a regulatory system that is appropriate to the operations of insurers and not styled according to the different needs of the banking sector.”

Jeff Soar, tax partner in financial service at EY, added: “We welcome the commitment of the Chancellor in today’s Autumn Statement to help the UK maintain its pre-eminent position in the global insurance market by making the regulatory and tax environment as welcome as possible with the aim to attract more reinsurance business here.

“We wait with interest to see how the newly announced “diverted profits tax” will interact with reinsurance premiums paid to connected parties and also how these payments will interact with the recommendations coming from the OECD as a result of their Base Erosion and Profits Shifting (BEPS) review.”