In the News
IUA: Brexit Bites Into London Market Premium Income

• David Pilla
• November 2020
• 

Premium income for the London market fell 2.8% in 2019 as a 10% rise in market income in London itself was offset by a 30% fall in business written elsewhere, but overseen by London operations, with Brexit looming, said the International Underwriting Association.

Shifts in premium volume from 2018 to 2019 “can be attributed to a number of factors, but have been largely influenced by companies adapting their operations to accommodate Brexit,” the IUA said in its London companies market statistics report.

“With the end of the Brexit transition looming our report shows that IUA members are well-positioned to continue serving their clients with new operational structures up and running,” Dave Matcham, chief executive officer, IUA, said in a statement. “Reorganization and the impending loss of financial services passporting rules has meant that a large amount of business written in Europe is no longer overseen and managed in the same way by London, but reported directly to operations located within the [European Union]. Such restructuring has increased costs for IUA members, making them globally more inefficient and, ultimately, less able to offer a better deal for clients.”

Gross premium income for the London company market was £21.44 billion ($27.68 billion) in 2019. Another £6.19 billion was identified as written in other locations outside London, but overseen and managed by operations in London, the report said.

The combined totals provide “an overall intellectual and economic premium” of £27.63 billion, down 2.8%, it said.

Last year, London's company insurance market reported an 8.1% increase in premium income to a record £28.4 billion in 2018.

“The picture, however, is complicated with a significant rise of almost 10% for premium written in London, which is offset by a 30% reduction in business written elsewhere but overseen by London operations,” the report said.

Premiums written in London were mostly from direct/facultative placements, at 76% of the total, as treaty business accounted for 24%, the report said.