London company market premium grew by nearly 25% in 2022

The London company market grew by nearly a quarter last year, with total premium income reaching £44.07bn for 2022, from an aggregate of £35.65bn for 2021, according to a new report by the International Underwriting Association (IUA). For 2022, business written under delegated authority arrangements totalled £4.034bn in premium. The latest annual edition of the IUA’s London Company Market Statistics Report shows that the total premium figure comprises £37.63bn of premium written in London and a further £6.44bn written in other locations, but overseen and managed by London operations. In 2022, premium written in London was divided 78% direct and facultative contracts to 22% treaty contracts. For premium written elsewhere but controlled by London, the split was 69% direct/ facultative to 31% treaty. The report states: “It is clear from this year’s commentaries that the driving force behind the premium growth of the last 12 months has been rising prices for existing business. Inflationary pressures were reported frequently in relation to property business, the sector’s largest class, but also for professional lines, political risks and a number of other specialty lines. Price rises are being driven both by previous market losses and withdrawals of capacity.” It adds: “Policy terms and conditions have also been subject to renegotiation, with an unbundling of composite structures, for example in policies previously combining marine, energy and political violence cover. Now these risks are each being placed on a standalone basis with appropriate pricing. This is particularly true for political violence, which has been influenced by the war in Ukraine.” According to the report, property remains the largest class of business for premium written in London, accounting for 27% of the company market total. Liability and professional lines business each account for a further 15%. Both property and marine premium grew significantly in 2022, the former by a quarter and the latter by a third. Other notable growth rates were observed in professional lines and cyber. The report notes that other classes of business highlighted by IUA members as having experienced a particularly good year for premium income were aviation, energy, bank trade finance and infrastructure finance, directors and officers and public liability. “Firms have sought to deploy their capital and underwriting resources into the lines of business that they deem most profitable. Some have withdrawn from areas that they deem uneconomic, for example, motor treaty,” the report states. The IUA notes that North America is an increasingly important source of business for London companies, generating overall premium of £9.45bn in 2022 (21% of the total market), up from £7.21bn the previous year. Premium written in London from this region grew by £1.79bn from £6.14bn in 2021 to £7.92bn in 2022. ‘Controlled’ premium from the US and Canada increased to £1.53bn, a 43% rise from the previous year, and has overtaken continental Europe, which recorded a declining figure of £1.14bn in 2022. There was also an expansion of ‘controlled’ premium from Latin/South America which, at £0.29bn in 2022 overtook Asia on £0.28bn to become the fourth-largest region. The report says the premium income of the London company market can be combined with that declared by Lloyd’s of London to give a 2022 total figure for the London Market as a whole of £90.78bn (IUA £44.07bn, Lloyd’s £46.71bn). “It is notable that the numbers for the two different underwriting sectors of the London Market are now extremely similar, representing something very close to a 50/50 split in overall premium income between companies and Lloyd’s,” says the IUA. Dave Matcham, chief executive of the IUA, said: “Our research this year once again provides concrete evidence of a thriving and unique community of insurers and reinsurers. IUA members continue to grow their operations across a wide range of business classes and geographies. This report shows the full extent of international speciality and wholesale coverage provided by companies in London. The income generated by such firms is significant and an important contributor to the UK economy.”

London company market premium grew by nearly 25% in 2022

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