London loses ground in emerging markets

The London market has lost ground in emerging insurance markets, with performance in Asia particularly hard hit, according to data analysed between 2013 and 2015 by the London Market Group (LMG) and Boston Consulting Group (BCG). Statistics from the London Matters 2017 report, reveal that London market premium in emerging regions fell from $10.5bn in 2013 to $9.3bn in 2015. “Asia remains the highest growth market globally, but was also the region in which London lost most ground between 2013 and 2015,” the report states. London Matters 2017 also found that London’s share of global reinsurance premiums declined during the period from 13.4% to 12.3%. London’s global share of commercial insurance remained unchanged at 5.8% and its market generally gained ground in established areas, including the US, the UK and specialty. The report highlights that the London market recorded 74% per annum growth in cyber premiums between 2013 and 2015. Nicolas Aubert, chairman of the LMG, said the London market retains significant strengths and added that 2015’s data does not reflect the impact of modernisation efforts recently introduced. “The 2015 data is too recent to reflect the tremendous effort that has been committed in the last 18 months to grow and modernise the market. However, this latest intelligence confirms that things are not improving and we cannot afford to be complacent,” Mr Aubert said. He added: “Now is the time to maintain our focus and indeed, review and revisit our plans, so that we can build momentum in our work to protect and enhance the pre-eminence of the London market in an increasingly global and competitive market.” Lack of diversity within the London market is also highlighted by the report. Figures for 2015 show that 41% of London market staff are female, in line with the UK average. However, only 5% of executives are female, below the FTSE 100 average of 21%. Mr Aubert said: “It is of particular concern for our industry’s future that attracting staff from diverse backgrounds remains a struggle for the London market, and market players need to build a sense of urgency in how they identify, develop and promote women into leadership roles.” Paul Clark, a partner at BCG, said: “BCG's analysis reaffirms London's traditional areas of strength and unique position in the global insurance market. Yet London's long-term competitiveness is under threat. To respond, the market will need to redefine its relationships with emerging markets and work with regulators to support market needs. The upcoming Brexit process could provide an opportunity to deliver on both.” Responding to the report, the International Underwriting Association (IUA) said the data outlines clear opportunities for growth. The IUA’s chief executive Dave Matcham predicted that the next few years will be vital in establishing London’s long-term relationship with emerging markets in Asia and Latin America. Mr Matcham said: “Clients naturally have a preference to buy locally if they can and many IUA member companies have increased their profile across a range of different markets in order to cater for this demand.” He added: “However, London Matters shows that in recent years we have increased our already high share of global specialty markets, suggesting that for the most specialist risks our market is the place to look. As emerging economies mature their appetite for such cover will no doubt increase, so it is important that we push ourselves to reach beyond traditional markets.” Mr Matcham continued: “London Matters 2017 reaffirms the importance of projects already underway to modernise and enhance our marketplace. I hope the report will serve as a warning that we should not relax our efforts, but rather reinvigorate our determination to succeed.”

London loses ground in emerging markets

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