According to the research Insurance Update issued by International Financial Services London (IFSL) UK insurance market becomes the second largest international centre for insurance after the US with 11% of global premium income leaving behind Japan in 2007.
The factors that contributed to the strength of UK insurance market in 2007 are: faster growth of new long-term insurance business in the UK than in Japan; better performing equity markets during the year in the UK; and faster growth of the UK economy.
Overall premium income of the UK’s insurance industry increased by a fifth in 2007 to a record 263 billion, largely due to an increase in occupational pensions premiums and to a smaller extent to an increase in life insurance premiums.
The impact of the credit crisis on the UK insurance market has so far been limited according to the report. New long-term premium income for the first three quarters of 2008 shows a 11% drop on the same period in 2007. Several of the UK’s largest insurance companies have made public the state of their capital and their exposure to potential further falls in bond and equity markets, demonstrating that their position is sound.
Gross premium income on the London Market was conservatively estimated at 24.5 billion in 2007, slightly up on the previous year’s total. Lloyd’s generated over two-thirds of premiums with the company market generating 28% and P&I Clubs the remainder. London is a key centre for international insurance and reinsurance, particularly for marine and aviation business and reinsurance.
The insurance sector accounts for 1.0% of UK GDP, although this excludes brokers and other auxiliary professions. The industry employs over 325,000 people, including 50,000 in the London Market. Insurance net exports increased by a third to 5.5 billion in 2007. Funds under management of insurance companies totalled 1,600 billion, almost double those of any other European country.
L.D.