Between 2013 and 2015, Singapore posted an increase of 4% p.a. in insurance business with gross written premiums reaching US$8 billion, recording the fastest growth rate compared to three other global insurance centres.
According to the “London Matter 2017” report on the competitive position of the London insurance market, Switzerland showed an increase of 0.6% p.a. in GWP during the same period to $31 billion, slower than Bermuda's 1% rise to $39 billion.
The report, launched by The London Market Group (LMG) and The Boston Consulting Group (BCG) on Tuesday, states that between 2013 and 2015, Core London Market premiums decreased marginally from $67.1 billion to $66.7 billion, representing a decline of 0.3% p.a. This was the net result of a $1 billion increase in commercial insurance premiums (+1.0% p.a.) being offset by $1.3 billion decline in reinsurance premiums (-3 0% p.a.).
Overall, the London Market was worth an estimated $91.3 billion in GWP, of which $24.6 billion was ‘managed business’ marketed through, but not written in, London.
Mr Nicolas Aubert, Chairman of the LMG, commented: “Despite the Market’s continued strengths, many of the key challenges identified in the first London Matters report in 2014 remain, and this should give us all cause for concern. The 2015 data is too recent to reflect the tremendous effort that has been committed in the last 18 months to grow and modernise the market. However, this latest intelligence confirms that things are not improving and we cannot afford to be complacent.
“Now is the time to maintain our focus and, indeed review and revisit our plans, so that we can build momentum in our work to protect and enhance the pre-eminence of the London Market in an increasingly global and competitive market.”
The 2017 findings revealed that London’s global reinsurance premiums declined, from 13.4% of the world's market in 2013 to 12.3% in 2015, continuing the trend reported in the 2014 London Matters report which estimated a 15% share in 2010.
A decline was identified from $10.5 billion in 2013 to $9.3 billion in London premiums from emerging markets in 2015. Asia remains the highest growth market globally; however was also the region in which London lost most ground between 2013 and 2015.
London’s share of commercial insurance premiums remains steady at 5.8% of the $800 billion global total, and the Market has grown in established markets such as North America and the UK, along with gaining share in its traditional specialist risk classes. It has also demonstrated its ability to innovate with an estimated 74% p.a. growth in cyber premiums from 2013 to 2015.
Overall, the market remains the largest global centre for commercial and specialty risk and continues to be a significant contributor to the UK and London GDP. The market’s direct contribution to the UK economy is estimated at 0.9% of GDP in 2015 and accounts for 26% of the contribution of ‘the City’.
London's share of insurance markets in Africa, Asia and Latin America were 3.3%, 2.7% and 8.1% respectively, all lower than in 2013 even though the markets themselves have grown.
Britain's vote to leave the European Union has provided a further headache for insurers, with Lloyd's of London planning a subsidiary in Brussels to compensate for a potential loss of access to the bloc.
An insurance industry lobby group known as London Market Group said it is working to make the London market an easier place to do business, with a more diverse workforce.