Britain on track to be centre for insurance-linked securities – Minister

The UK now won’t have to miss out on this $75 billion business

Britain on track to be centre for insurance-linked securities – Minister

Insurance News

By Terry Gangcuangco

There’s more good news for insurers. Not only has the new City Minister revealed that the government is pushing ahead with plans to reform the hotly contested Ogden rate – Steve Barclay has also shared positive developments regarding insurance-linked securities.

A Financial Times report said the recently appointed economic secretary to the treasury has assured that these securities – which connect investors to insurance buyers – will be introduced in Britain. According to the report, the UK has missed out on the $75 billion business previously for lack of regulation.    

“The regulations are now being finalised so they can be laid in parliament before the summer recess, with a view to the regime coming into force in the autumn of this year,” said Barclay in a letter to the London Market Group (LMG).

Malcolm Newman, chairman of LMG’s task force on insurance-linked securities, described the move as a “great example” of finding ways to innovate London’s leading position in the world of risk transfer. “We hope this partnership with government sets a strong precedent for other initiatives,” Newman was quoted as saying.

A Reuters report, meanwhile, said a total of $5.8 billion worth of catastrophe bonds – a type of insurance-linked securities – were issued last year, according to broker Aon Benfield.


Related stories:
We’ll reform Ogden – new City Minister
ILS regulations a potential boost for UK

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