London Market Group calls on government and insurance industry to work together after Brexit | Latest news
The London Market Group (LMG) trading body has called on the government, regulators and the insurance industry to work together after Brexit for its five-point plan, launched on June 7, 2021.
This plan calls for relevant regulatory and legislative changes to help develop the insurance industry in the months and years to come, taking full advantage of new opportunities open to the UK now that it has left the European Union. (EU).
Sean McGovern, Managing Director of AXA XL, Board Member of the London Market Authority and sponsor of LMG’s government relations work, said: “Right now the UK government is considering how financial services should evolve in the future. a post-Brexit world and the London market wants to seize the opportunity when there is a willingness to support positive change that can benefit the insurance industry.
“The LMG participated in various government consultations on the future regulatory framework and Solvency II.
“This document will form the backbone of a global campaign led by LMG, in collaboration with ministers, parliamentarians and regulators to reinforce the importance of the insurance market and ask for what it needs to continue to grow. grow globally. “
The UK’s competitive position
The LMG five-point plan includes:
- Introduce a more proportionate approach to regulation: Recognize the nature of the large, complex risks covered by the industry, as well as the sophisticated business buyers it serves, through a more proportionate approach to regulation.
- A duty of international competitiveness for British regulators: Ensure that the London market remains the most attractive home for large risks thanks to an obligation of international competitiveness for British regulators. This should include the presentation of proposals for international competitiveness to be part of the statutory objectives of regulators.
- Reform Solvency II to encourage investment abroad: Make London a natural home for foreign (re) insurance companies by reforming the Solvency II regime. Going through additional and unnecessary regulatory processes is costly and time consuming, preventing foreign companies from operating in the UK.
- Promote a captive market in the UK: Increase buyer choice and develop the market by developing and promoting a captive market in the UK. The current Solvency II review offers the UK the opportunity to develop a more attractive regime for captives.
- Access to new and emerging markets: Accessing emerging markets around the world can help businesses build resilience to natural disasters and climate change through trade negotiations, regulatory dialogues and market promotion.
McGovern added: “We have presented a five-point plan to support the UK’s competitive position, increase our exports and increase levels of foreign investment both in London and in parts of the UK, where the UK is market is expanding. “
Insurance is vital for business
LMG represents more than 350 underwriters and brokers in the specialist insurance market in London.
In his latest report – A plan for the future, which further explains the five-point plan – the trade body said “insurance is the cornerstone of trade, investment and commerce”.
The London market generates over $ 100 billion in revenue per year and is growing at a rate of just under 14% per year, making it larger than all of its closest competitors combined.
Meanwhile, the report also pointed out that London is attracting considerable foreign investment to the UK.
LMG research has shown that over 66% of the capital entering the UK commercial insurance market is owned by foreigners. The market thrives because foreign companies from the EU, Switzerland, the US and Japan want to trade in London to access businesses and take advantage of the expertise and ecosystems available.
The report cautions: “While we have an advantage, it is crucial that we do not rest on our laurels. Steps must be taken to maintain the competitive position of the UK.
He also highlighted a more proportionate approach to regulation because “at present brokers are regulated on a ‘one size fits all’ approach by the FCA, despite dealing with sophisticated client firms with significant resources. and professional advisers at their disposal.
The report continues: “These are not consumers who need protection like individuals or customers of SMEs. However, the FCA makes almost no distinction in how it oversees a London market broker working in specialist markets in London from how it oversees a retail insurance broker dealing with home and auto insurance needs in London. ‘an individual.
The LMG recommended that in the next review of the future regulatory framework, which examines how the financial services regulatory framework needs to adapt to adapt in the future, in particular to reflect the UK’s new position in outside the EU, the government should come up with proposals to offer a more layered and proportionate approach to individual sectors within the insurance industry and the type of client served.
Indeed, “separate models for personal, commercial and reinsurance insurance which reflect the nature of the risks of these different sectors would contribute significantly to the competitiveness of the UK”.