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Jobs in the London insurance market have recovered from a pandemic dip to reach their highest numbers in at least a decade, as the industry benefits from its specialist knowledge of everything from shipwrecks to cyber attacks.
According to data from the London Market Group, a trade body that represents brokers and insurers, headcount at London’s commercial insurance and reinsurance companies reached 59,000 in 2023, up from 41,000 in pandemic-hit 2021 and the highest figure in data going back to 2013.
Caroline Wagstaff, chief executive of LMG, said that at a time of widespread concern about the health of the UK stock market, insurance was a “crown jewel that no one pays attention to”.
LMG estimated that the London market reached the equivalent of about $180bn in gross written premiums last year, double the levels of a decade ago, as worries about climate change and other threats pushed up demand for cover.
Wagstaff said the growth reflected London’s place as an important destination for people seeking to negotiate complex policies. “The brokers tell us they are seeing more business coming to London. They are busier,” she added. “It’s where people bring the difficult stuff.”
LMG’s latest market share data, for 2022, showed that London had increased its share of the commercial insurance and reinsurance market — cover provided to other insurers — to 8.3 per cent, its highest level in at least 12 years, despite the costs and disruption following Brexit and the pandemic.
The $159bn of insurance and reinsurance business done in London in 2022 included $44bn that was brokered in the City but then placed with an insurer elsewhere. “This is expertise money,” said Wagstaff.
The London market — which includes Lloyd’s of London and other City insurers and brokers — contributes about a third of the City’s economic output, according to the LMG.
Lloyd’s had its best underwriting results since 2007 last year and groups including Japan’s Mitsui Sumitomo have promised to invest more in the market.
There are threats to London’s position, however, executives warn. In areas such as insurance-linked securities, a form of reinsurance bought from investors, other hubs such as Bermuda have made inroads. Bermuda and Singapore, though smaller, have grown faster than London since 2014, according to the report.
Wagstaff repeated the body’s recent call for reforms to encourage innovation in London. “People have choices [about where to buy insurance], and everyone needs to be alive to that, and think about how can we make [London] a positive choice.”
The London market has added specialist staff to help meet demand for cover, as well as on the claims side in recent years because of a surge in payouts after the pandemic.
But Wagstaff said the market also faced a demographic challenge on staffing: about half of employees are over 40, a bigger proportion than a decade ago.
“That’s why we do the outreach, we are trying to make specialty insurance a destination career,” Wagstaff said. London insurers were making efforts to attract more young people, she said, while the LMG ran its first apprenticeship programme last year for UK school pupils in their final year.