A new report released by lobby group TheCityUK has warned that Brexit could cause up to 40% of London’s insurance premiums to drift away to local markets.
It’s report, titled UK financial and related professional services: meeting the challenges and delivering opportunities
, has issued a warning to London’s insurance market that it will have to adapt in order to stay competitive, as reported by The Financial Times.
The report states London is a particularly expensive place to buy insurance, and up to 40% of the city’s premiums could leave to cheaper, local options if the city doesn’t innovate.
London remains a leader in traditional markets like marine, the report states, but more work needs to be done in emerging fields like cyber and reputational insurance to stay competitive. If London doesn’t focus on these potential growth areas, then it runs the chance of being left behind.
The report also covers the wider implication of the Brexit vote and what London should prioritise when considering the EU exit.
“It is of utmost importance that UK and EU firms continue to trade freely under broadly similar conditions and that any transition is managed effectively,” the report states, given how much business is interconnected between the UK and Europe. While Europe is still important, the report also suggests a greater focus on selling to growth markets China and India is necessary to cement the City’s place as a financial destination in the future.
While London is the focus of the report, it also suggests areas outside London need greater attention. Increased automation is threating back office jobs in the financial and professional services industry across the UK. Two-thirds of employees in the financial and professional services sector work outside London. Without greater efforts from local employers and universities, the divide between London and the rest of the UK may only continue to grow.
The report also stated attracting the world’s best talent is also a priority, with a focus on making visas easy to access.
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