We want to create an environment for innovation, so that the London Market is able to respond to new client demands and existing and emerging risks. To do this we need to ensure that we have the right business environment.
This workstream is working to help us achieve this aim, and the work includes:
- Working with the UK government, parliamentary parties and the civil service to ensure they better understand the position of the London Market and its place in the UK economy
- Developing an agenda for government to enhance the international competitive position of the market
- Ensuring that the regulation of the market is appropriate and is proportional to the risks we pose, recognising the market competes worldwide
London should be the fulcrum of insurance invention, the place where new solutions that meet new customer demand are developed and nurtured.
The LMG Board sponsor is Malcolm Newman.
Workstream members are:
– Adam Thomas, Luther Pendragon
– Cameron Murray, Lloyd’s
– Ashley Prebble, Clifford Chance
– Barry Le Page, LMG
– Christopher Croft, LIIBA
– Clare Lebecq, LMG
– Dave Matcham, IUA
– James Walmsley, Lloyd’s
– Paul Davenport, LMA
– Scott Farley, IUA
– Simon Whale, Luther Pendragon
– William Gray, Luther Pendragon
April 4, 2019 – the London Market Group (LMG) today unveiled the next stage of its work to take advantage of new trading opportunities that may emerge in post-Brexit world. These fall broadly in two categories: working with the UK government on formal trade negotiations and dialogues as well as activity to promote the market.
Malcolm Newman, Managing Director of SCOR’s EMEA Hub and sponsor of the workstream to create the right business environment said: “We believe that to make the most of these opportunities, we should move the conversation on insurance away from simple indemnity and focus on how the industry can support economic growth and resilience across the world. Insurance has a positive economic impact: a 1% rise in insurance penetration translates into a 13% reduction in uninsured losses, a 22% reduction in taxpayers’ contribution following a disaster and increased investment equivalent to 2% of national GDP.
“The London Market can play a critical role in supporting the economic development of countries across the world, growing trade in existing markets and opening new ones.
“The LMG has identified a number of priority markets that it will seek to work on with the Treasury and the Department of International Trade. Some of this will clearly depend on the Brexit discussions which are currently ongoing, but we feel we can make progress now using many of the existing trade fora. Our target markets include the US, Switzerland, ASEAN, Latin America and the MENA countries. We would like the UK Government to develop an approach to third countries that seeks to liberalise access to such markets. Using its embassies, consulates, and the many trade discussions and dialogues it is having, the UK Government can also help London to promote insurance and support the message that it helps foster sustainable economic and social development.”
Next steps include:
- Bringing the industry together and building a consensus regarding the requirements for the London Market in a potential new trading arrangement with Switzerland.
- Ensuring that London Market issues are fed into the work of the UK-US Regulatory Working Group to maximise alignment with the US market.
- Promoting the value of the London Market in key ASEAN economies such as Indonesia and Malaysia highlighting how the market can help them deliver their ambitious economic development goals.
- Continue to support the work of the Islamic Insurance Association of London to promote London’s (re)takaful offer.
Download Seeking New Trade Opportunities from the relevant documents panel
The London Market Group (LMG) has published a detailed proposal for the UK Government that sets out a mechanism that would enable the EU and UK to maintain access to their insurance markets and control over their respective regulatory systems, once the UK leaves the European Union (EU).
At the heart of the LMG’s proposal is the need to allow clients uninterrupted access to London’s breadth of expertise and specialist risk capacity. It will ensure that neither the EU nor UK will have to sacrifice market access or control over their respective regulatory regimes.
The LMG Brexit taskforce, representing the UK’s commercial insurers, reinsurers and brokers, has centred its proposal on a Free Trade Agreement (FTA). This would be a bespoke agreement that would permit mutual market access and recognition of both the EU and UK’s prudential regimes – with a Solvency II equivalence outcome built into it. It would also include a recommended framework for supervisory cooperation, which would align regulatory oversight of (re)insurers and brokers/intermediaries in both the EU and UK.
The agreement proposes a ‘prudential carve-out’ and is not a new concept to the EU. The solution builds on bilateral agreement between the EU and the US that came into force on the 7th November, for reinsurance business. This allows EU and US reinsurers to operate in each other’s’ jurisdiction, without the need for a local presence, and it aligns their regulatory systems via a mutual
regulatory cooperation and collaboration agreement.
The LMG is also suggesting a complementary transition period. This would provide continuity of client service by allowing the London Insurance Market to operate as if EU status is preserved until such time as the FTA is agreed. Such a period would further allow sufficient time for the Market to reshape in line with the FTA outcomes.
Malcolm Newman, MD of SCOR’s EMEA Hub, Chairman of the International Underwriting Association and sponsor of the LMG’s taskforce said:
“Our proposal offers clear mutual benefits to clients on both sides of the Channel, and creates a workable solution that would mean that neither the EU nor the UK would have to sacrifice market access or control over their respective regulatory regimes, solving the access versus control dilemma. The London Market plays a vital role in pooling risk across the EU and UK markets, and we are all focused on ensuring continued access to the broad range of insurance services, expertise and capital that we offer to EU businesses. Our goal is to ensure that clients are not left in a situation where there is contractual uncertainty and protection gaps post Brexit.”
The LMG proposals have been designed to:
- Prevent disruption and financial instability for EU clients that rely on the London
- Market for essential risk mitigation services
- Remove the risk of gaps in vital insurance cover
- Provide contractual certainty for business transitioning to new UK-EU models, and for businesses in run-off at the time of Brexit
- Deliver an orderly transition – by providing EU (re)insurers and brokers/intermediaries with sufficient time to transition and secure coverage certainty for clients, and maintain client service standards
- Remove pressure from EU & UK firms to make premature decisions to move business bases prior to the Brexit negotiations being concluded
Latest 5th August :
With a new UK government in place, and positions in the Treasury filled, the LMG will be once again reaching out to ministers and officials to ensure they understand the implications of a “no deal” to the London insurance market – as well as highlighting the features the market would look for in the Withdrawal Agreement.
Clare Lebecq, CEO of the London Market Group commented “We have build up strong relationships with Westminster and Whitehall in the last several years, and many of them now understand the importance of the London insurance market to UK plc. With John Glen returning as City Minister there is a degree of continuity, but we are still seizing the opportunity to reach out to new Ministers so they know what the market is looking for in each possible scenario. We will continue to ensure that the market’s voice is heard on Brexit”
To view the latest LMG Brexit update document visit Key Documents and download “A new Relationship with the European Union”