LONDON–The London Market Group (LMG) and The Boston Consulting Group (BCG) launched London Matters 2017 today, an update of the fact base around London’s position in the global insurance industry from 2013 through 2015. While several positive trends affirm the traditional strengths of the London Market, the data reveals significant challenges, particularly in reinsurance, emerging markets, and diversity.
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 modernize 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 preeminence 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% in 2013 to 12.3% in 2015, continuing the trend reported in the 2014 London Matters report, which estimated a 15% share in 2010. London premiums from emerging markets declined from $10.5 billion in 2013 to $9.3 billion in 2015. Asia remains the highest-growth market globally but was also the region in which London lost the most ground between 2013 and 2015.
The 2017 report reveals that diversity continues to be a challenge. While the proportion of female staff at 41% is in line with the UK average, the proportion of female executive directors at 5% in 2015 remains very low in comparison with the FTSE 100 average of 21%.
Mr. Aubert continued, “It is of particular concern for our industry’s future that attracting staff from diverse backgrounds remains a struggle for the London Market, and market players need to build a sense of urgency in how they identify, develop, and promote women into leadership roles.”
Paul Clark, a partner at BCG, said, “BCG’s analysis reaffirms London’s traditional areas of strength and unique position in the global insurance market. Yet London’s long-term competitiveness is under threat. To respond, the Market will need to redefine its relationships with emerging markets and work with regulators to support market needs. The upcoming Brexit process could provide an opportunity to deliver on both.”
London’s global share on commercial insurance premiums remains steady at 5.8%, and the Market has grown in established markets such as North American and the UK and gained 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 center for commercial and specialty risk and continues to be a significant contributor to 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.”
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Charlie Evan, Luther Pendragon | Tel: 020 7618 9123
The London Market Group (LMG) is a market-wide body, bringing together the specialist commercial (re)insurance broking and underwriting communities in London.
It speaks collectively for market practitioners on growth and modernisation issues, and its aim is to build on London’s position and reputation as the global centre of insurance excellence.
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 85 offices in 48 countries.