Insurance should be ours. The first recognisable insurance contracts emerged from Britain’s maritime economy. By the late 1600s, merchants and shipowners faced the constant peril of storms, piracy and loss at sea. They gathered in London’s coffee houses to share intelligence and spread risk among multiple backers. The most famous of these, Edward Lloyd’s Coffee House, became the informal marketplace where risks were written and later evolved into Lloyd’s of London, formally established by Act of Parliament in 1871.
But there are worries that threats to Britain’s pre-eminence in insurance are on the rise which is why Chancellor Rachel Reeves will today meet senior insurance executives in Downing Street to urge the industry to channel more of its investment into the UK, following her recent moves to ease regulation on the sector.
According to the London Market Group, insurance contributes roughly a third of the City of London’s economic output and supports 60,000 jobs. Yet the capital’s market share in specialist lines has been gradually eroded. Since 2014, rival centres such as Bermuda and Singapore have expanded far more rapidly - by about 9-10% annually compared with London’s growth rate of roughly 5-6% over the same period - as international insurers diversify their operations and capital bases.
The chancellor’s immediate concern is the flow of investment away from the UK into offshore jurisdictions. Bermuda’s reinsurance market has expanded sharply over the past decade, now underwriting nearly $190 billion in annual premiums, while Singapore’s general insurance market has doubled in size. London, although still dominant in specialist risk, has grown at a slower pace.
Reeves is expected to use today’s discussions to reinforce that point and to encourage insurers to anchor more of their global operations in Britain. The Treasury hopes the combination of regulatory reform and political engagement will demonstrate that London remains a safe, stable and profitable environment for long-term capital.
The chancellor and insurance leaders are also due to discuss the fast-growing cyber insurance sector, following a series of recent attacks on major UK firms including Marks & Spencer, Harrods and Jaguar Land Rover. The latter, which was uninsured, is expected to bear the full cost of the incident.
Treasury officials said Reeves was open to “a constructive conversation with insurers to boost growth in the cyber insurance market,” though the focus would remain on streamlining regulation and reducing costs. Industry figures view small and medium-sized enterprises as a major growth opportunity, given the rising frequency and cost of cyber events.
Executives are also likely to press Reeves to move faster on reforming the senior managers and certification regime, which many firms view as overly complex.
Today’s meeting marks a key step in the government’s engagement with the financial services industry ahead of the chancellor’s first Budget on 26 November. Reeves faces pressure to show that her government can deliver both competitiveness and prudence - cutting unnecessary regulation while maintaining stability and consumer protection.
The insurance sector’s growing role in funding infrastructure, renewable energy and urban regeneration makes it a critical part of the government’s wider investment strategy. But London’s position as the global leader in specialty underwriting now depends on how convincingly the Treasury can persuade companies that the capital is still the best place to do business.
