Caroline Wagstaff, CEO of the London Market Group (LMG), has observed that if London is to remain the place where the world brings its risks, action must be taken at both a firm and market level to make specialty insurance a destination career for young people.
Wagstaff’s comments come as part of LMG’s 2024 edition of its London Matters research, in which the firm noted that the London Market employee headcount increased by over 40% in 2021-2023.
However, over the past decade, the London Market workforce has only grown at c.2% per year, well below the premium growth average of c.7%.
Also, there are as many people over 50 as under 30, which reportedly “compares unfavourably” with the financial services average.
“The concentration of talent in the London Market is one of its USPs. The intellectual capital and wealth of experience in risk mitigation and transfer amongst London Market businesses means that London provides technical expertise and experience that it is hard to replicate anywhere else,” Wagstaff said.
She continued, “If London is to remain the place where the world brings its risks, we need to take action at both a firm and market level to make specialty insurance a destination career for young people, delivering the diverse thinking that allows us to deliver solutions to current and future challenges.”
LMG’s report additionally revealed that the London Market employs 60,000 people and contributes nearly £50bn to the UK economy – 2% of GDP overall, an increase of 26% on 2020.
“It is the world’s largest specialty insurance market – nearly twice as large as its nearest competitor and earns $160bn in income every year,” LMG added.
However, the firm said that this position “cannot be taken for granted”, adding that between 2020 and 2022, the London Market grew by 32%, while the same period, Bermuda saw growth of 39%.
“The market for captive insurance is expected to reach $161 billion by 2030 – but the UK currently see none of this business,” LMG continued.
Sean McGovern, Chair of the London Market Group, concluded, “Although the London Market remains the largest hub of direct insurance and reinsurance when compared to other centres, its rate of growth has been slower than some of its key competitors and over the last decade its market share has remained broadly stagnant. So, we cannot take our place in the world for granted.
“London has historically been a hub of innovation, developing market-leading solutions in areas like cyber. As domestic markets develop their own solutions, however, business tends to migrate from London.
“To maintain its status, London needs to continue to drive new product innovation in areas like green technology and to ensure it can offer the full range of risk transfer tools.”
“To continue to punch above our weight there is an urgent need to create a regulatory environment that facilitates UK domiciled captives, demonstrating both at home and abroad that the market can respond swiftly and effectively.”
