Just 47% of surveyed insurance leaders said they were confident that the UK would be where it is now in 2027, so is the UK’s optimism beginning to slip?

By Jon Guy

Jon Guy

Jon Guy

Barely days into 2024, the debate has already reignited over the future of the UK as the world’s leading financial services centre.

As the insurance market digested the results of the 1 January reinsurance renewals and what they will mean for risk appetite and pricing, consultancy firm KPMG UK yesterday (3 January 2023) announced the results of its annual survey of financial services leaders.

Despite the grim economic outlook, it seems that financial service leaders feel there is a lot to be positive about when it comes to business growth.

However, while bankers and asset managers are bullish about the future, it seems insurers are far less confident.

When asked how confident they felt about the ability of the UK to maintain its position as a global financial centre over the next three years, over half the insurers questioned said they were not optimistic that the UK could maintain its position.

Just 47% of surveyed insurance leaders said they were confident that the UK would be where it is now in 2027.

International competitiveness 

International Underwriting Association (IUA) chief executive Dave Matcham highlighted the concerns facing the London market, despite reporting a significant rise in business for 2022, in its latest annual report.

“Our industry is internationally competitive, with IUA members invariably part of large global groups operating in multiple territories across continents,” he explained.

“In order to ensure that the London company market continues to flourish, the business environment must be optimal. A flow of talent to match the many exciting career opportunities available in the sector is vital.”

Matcham said regulatory accountability would remain an essential facet of the London market’s make up.

“This is currently an important topic for debate as the government’s new Financial Services and Markets Bill is enacted,” he said.

”The legislation places new responsibilities on insurance supervisors to consider the impact of their actions on the competitiveness of the firms they regulate. Insurers will be monitoring and measuring how this duty is performed and there are many metrics that regulatory authorities could publish – from the speed of authorisation decisions to the accuracy of cost benefit analyses.

“The outcome of such benchmarks will materially impact the future development of the London company market.”

Brexit was deemed to be the death knell for the UK financial services market, but the failure of a European rival to emerge as the clear hub for the single market has seen the reports of London’s demise to be greatly exaggerated.

However, the London market’s research in recent years has shown that, while it has maintained its share of the North American and European markets, it is not matching the growth of the dynamic and emerging markets in Asia and the Middle East and North Africa region.

The threat has always been there, as has the optimism that the UK can succeed. But is that beginning to change?