A senior executive of Allianz warned that Britain could lose more insurance business to Switzerland and Bermuda unless the government and the industry work out means to compete better globally.
No global insurance company has returned to make the UK its home again, neither has any domestic company grown globally, said Clement Booth, chairman of Allianz’s UK unit.
UK’s loss was Bermuda’s gain as the tiny island attracted $65 billion in investments in the insurance industry generating 10,000 jobs, he added.
“In the UK we should try to compete for a bit of that”, Booth argued while speaking at the ABI’s conference yesterday.
“We need to reflect as a community … on the capital that is flowing into Bermuda and Switzerland and even Ireland. I would argue that much of this could have ended up in the UK, and specifically in the City of London”, Booth said.
“It would be nice if political leadership were to be clearer that that should happen”, he added.
The domestic regulator announced this week that Britain is the world’s third largest insurance market with assets totaling £1.8 trillion.
For setting up business, insurers and reinsurers look for three parameters; ability to determine premium without undue regulations, stable long-term legal and tax regime and statistical data to price risk, Booth said.
“You can tick most of these boxes in the UK context, but there is a global competition for capital out there in the insurance world”, he observed.
Financial services minister Mark Hoban replied the government is already working on these issues. Reforms in the sector have already been initiated and efforts are underway to make the tax regime generally competitive, he said.
While life-insurance taxes were being examined, efforts are being made to slash corporation tax to ensure Britain remains the most competitive country among advanced economies, Hoban said.