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Chancellor Rachel Reeves will on Wednesday urge some of the world’s biggest insurance companies to invest more in London, as the UK contends with increased competition from rival industry hubs overseas.
At a meeting in 11 Downing Street, Reeves will tell insurance executives she has cut red tape in the sector and now wants companies to repay that move by increasing spending in the UK market to help bolster growth.
Insurance bosses including Lloyd’s of London chair Sir Charles Roxburgh, Hiscox chief executive Aki Hussain and Convex chief executive Paul Brand are expected to attend the meeting.
The chief executives of large insurance brokers and reinsurance businesses — including Howden’s David Howden and Swiss Re’s Andreas Berger — are also due to participate.
Reeves is seeking to boost the economy ahead of her Budget on November 26, and one ally said: “The chancellor has set out plans to cut red tape in the insurance sector and now she wants companies to invest more in the UK and build on our competitive advantage.”
The insurance industry contributes about a third of the City of London’s economic output and employs 60,000 people, according to trade body London Market Group.
But London faces intensifying competition from rival insurance hubs such as Bermuda and Singapore, which according to LMG data have grown faster than London since 2014.
“London remains the dominant player in speciality risk attracting huge amounts of capital from around the globe, but the market is becoming increasingly competitive,” Colm Holmes, chief executive of Allianz UK, told the Financial Times ahead of the meeting with Reeves, which he is expected to attend.
Reeves and the industry bosses are also due to discuss cyber insurance following recent hacks at retailers Marks and Spencer and Harrods, and at carmaker Jaguar Land Rover. JLR was uninsured and is expected to bear the full cost of the cyber attack on the company.
The insurance industry sees an opportunity to sell more cyber cover, particularly to small and medium-sized companies, owing to an increase in such attacks, according to sector insiders.
Treasury insiders said Reeves was open to “a constructive conversation with insurers to boost growth in the cyber insurance market” but added it would be focused on cutting red tape and other ways the government could reduce the burden of doing business.
Insurance bosses are set to ask Reeves to move more quickly on simplifying regulations including the UK senior managers and certification regime.
The meeting with Reeves comes after the government accepted a key industry demand in July by proposing lower capital requirements for so-called captive insurers — in-house insurers that are used by large businesses to handle risks.
Meanwhile major financial companies will on Wednesday discuss with City minister Lucy Rigby a plan to develop what the Treasury called a “pipeline of AI and digital skills” to boost productivity in the sector.
Rigby will meet executives from companies including Lloyds Banking Group and Aviva to discuss the initiative, which will feed into a “financial services skills compact” to be published next summer.
