Briefing: As Reeves urges insurers to back London, where should investment be made?

Among key news stories this week was chancellor Rachel Reeves reportedly urging insurance companies to further invest in London to combat increased competition from overseas hubs.

The Financial Times reported on 5 November 2025 that Reeves met with insurance executives at 11 Downing Street to tell them that she has “cut red tape” in the financial services sector and now “wants companies to repay that move by increasing spending in the UK market to help bolster growth”.

This announcement comes ahead of the government’s Autumn Budget, which will be delivered by Reeves on 26 November 2025. Speaking ahead of this budget, the chancellor continued: “We’ve got huge potential – world-leading brands, dynamic industries, brilliant universities and a skilled workforce. We’re a global hub for trade.

“Fixing the foundations has been my mission this past year.”

And as Reeves seeks to boost the UK’s economy, the Financial Times’ report suggests that she feels insurance plays a pivotal role in fulfilling that ambition.

Growth data

There is no doubt that the London market plays a massive role in the UK economy.

According to the London Matters 2024 report, published by the London Market Group (LMG) in May 2024, the “London market plays a fundamental role in supporting and stimulating global economic growth by de-risking economic activity, facilitating investment and rebuilding of lives, communities and businesses after disaster strikes”.

The London market is continuing to grow. According to data published in LMG’s report, the marketplace contributed £49bn to UK gross domestic product (GDP) in the last year – this is higher than the £39bn GDP contribution in 2020.

The report’s figures also showed that nearly 60,000 people are employed by London market firms, with 74% of these jobs being based in London itself.

However, London is facing competition from rival insurance hubs across the globe. For example, the LMG’s report stated that the London market grew by 32% between 2020 and 2022 versus US excess and surplus (E&S) growth of 59%.

“The US E&S growth has been driven by increasing localisation of underwriting – with some syndicates opting to shift stamp capacity away from London,” the report said.

Its data also showed that other financial services hubs, such as Bermuda and Singapore, have grown faster than London over the last few years.

Where should investments go

Jamie McDonnell, London market director at Guidewire, said: “The London insurance market is arguably the most admired in the world, often referred to as the spiritual home of insurance, so any move to further drive investment in the sector is welcome.

“However, we don’t have a divine right to that mantle.”

So, as the chancellor looks for insurance firms to further invest in the UK, the key question is where should investments be focused?

At the end of the day, there has always been a de facto link between human resource and gross written premium (GWP) ambition. As McDonnell explained, to write more business there needs to be more skilled actuaries, underwriters and claims handlers, making investment in talent key.

I feel that more investment in technology from firms in the UK could also be key to retention, given it could allow the workforce to go above and beyond, potentially resulting in better growth.

Investment in technology has already been seen in the London market through Lloyd’s Lab, which is an innovation hub and accelerator programme that connects startups with the insurance industry.

It offers mentoring, collaboration and funding opportunities.

Speaking at the 25th Insurance Innovators Summit in London on 5 November 2025, Shoib Khan, director of insurance supervision at the Bank of England (BoE), noted that the London market ”has a history and reputation for innovation”, as demonstrated by Lloyd’s Lab.

However, he stressed to event delegates that now is the time to “light the blue touchpaper” and drive greater innovations.

McDonnell agreed that “the right technology and tools can empower the workforce to punch above its weight and further grow our share of the global market, which is increasingly challenged by other global hubs like Bermuda, Dubai and Singapore”.

He added: “Leading insurers have demonstrated that the best way to do that is by transforming their core technology platforms and benefiting from the greater agility and performance that comes from transitioning to the cloud.

“It is only by removing legacy foundations that insurers will reap the rewards of developing technologies, including data analytics and artificial intelligence (AI).”