Working with government to build competitiveness

We want to create a business environment in which the market can flourish, so that London is able to respond to new client demands and existing and emerging risks.

To help us achieve that the LMG will:

  • Proactively engage 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
  • Develop an agenda for government to enhance the international competitive position of the market
  • Ensure that the regulation of the market is appropriate and is proportional to the risks we pose, recognising the market competes globally for business, investment and people.

London should be the fulcrum of insurance invention, the place where new solutions that meet changing customer demands are developed and nurtured.

Government and regulation


Significant headway has been made in securing the key goals that we originally set out in 2021 to improve the business environment in which the insurance market operates. These include:

  • Amendments to the Financial Services and Markets Act 2023;
  • Changes to the UK Solvency regime post Brexit; and
  • Development of insurance products so that the market can contribute to the country’s economic growth.
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LMG 5-point plan

1) Recognise the nature of the large complex risks we cover and the sophisticated corporate buyers we serve, through a more proportionate approach to regulation

Thanks to the LMG’s sustained campaigning, the Financial Services and Markets Act now includes measures which enhance the accountability of the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA). Following pressure from the LMG, action has been taken by the Government requiring:

  • Both of the regulators to focus on improving their operational effectiveness and publishing more granular data on their performance regarding case handling and authorisation processes.
  • The Government also listened to concerns raised by the LMG about the need to ensure greater independence and transparency around the work of the new Cost Benefit Analysis (CBA) panels.
  • The Panels now have a statutory requirement to include representatives from authorised firms to ensure industry has a voice and they must publish a statement on their approach to recruiting panel members to make it more open. The regulators must also report annually on their recruitment to the panels.

2) Ensure that the London Market remains the most attractive home for large risks through an international competitiveness duty for UK regulators.

An international competitiveness and growth objective for both regulators has been secured within the Financial Services and Markets Act 2023, following a long-term campaign from the LMG to introduce such a duty. Both regulators now have a statutory obligation to report on how they are facilitating the UK’s international competitiveness and growth.

Thanks to the pressure applied by the LMG during the passage of the Act, the Government strengthened the legislation by adopting many of the LMG’s proposed amendments. The Act now includes:

  • A statutory duty for the PRA and FCA to publish two reports on how they have embedded and advanced the new competitiveness objective within 12 and 24 months of the Act coming into force.
  • Additional powers for HM Treasury to require the regulators to provide additional reporting on their statutory objectives including how they are facilitating international competitiveness.
  • A requirement for the regulators to provide information on the arrangements for how stakeholders, including the regulators’ statutory panels, can make representations on rules to be reviewed, and how those representations will be considered.
  • Equal powers for House of Lords Committees and a future Joint Committee of Parliament to scrutinise the work of the regulators.

3) Make London a natural home for foreign (re)insurance companies by reforming the Solvency II regime.

HM Treasury announced proposals to remove the requirements for UK branches of foreign insurers to calculate branch capital requirements and to hold local assets to cover them.

4) Increase the choice of buyers and grow the market by developing and promoting UK captives

The LMG has met the City Minister to discuss captives, together with captive owners and market experts, to explore the case for designing a competitive UK captive insurance regime. We welcomed his commitment to “work with industry to support growth and international competitiveness across the UK’s insurance sector, helping ensure the UK remains a world leading destination for risk management solutions and insurance innovation.” The LMG will continue its work with the Government and PRA towards the introduction of a UK captives regime.

The LMG continues to work with the Government and the PRA to constructively support the improvements being made to the authorisation process for the UK Insurance Linked Securities (ILS) regime, which was introduced in legislation following a long-standing LMG campaign. The LMG has formed an expert ILS Working Group to consult with market practitioners on specific improvements that could be made to the regime and present its findings. The PRA has said it will consider this and how it can bring forward a package of reforms.

5) Create a ‘welcome mat’ for overseas investors

The LMG continues to call for a more welcoming environment in the UK for international investors seeking to set up businesses, create jobs and invest in the UK.

Given post Brexit freedoms, now is the time to consider what more government, regulators and the industry could do together to encourage and welcome this crucial investment.

Key documents