- 60% of all aviation insurance that is provided across the globe comes stems from the UK market
- This translates to 52% of all energy insurance worldwide, as well as 33% of all shipping insurance
- The £60bn worth of premiums which are written by the London Market on an annual basis surpass the Bermuda market by almost double.
The United Kingdom- and particularly the City of London, has always had a special relationship with the insurance industry.
London's fast-paced coffee culture back in the 17th century gave rise to the prominent and world-renowned maritime insurance industry. This facilitated Britain's standing as a trading superpower and eventually led to the launch of the world's first ever fire insurance companies- in light of the Great Fire of 1666, which conducted business not only within the UK, but abroad as well.
The Development of the UK Insurance Industry
Many world 'firsts' followed. These included: life insurance companies, stock insurance companies, work related injury insurance, vehicular insurance, aviation insurance, burglary, and even trade credit insurance, all which astoundedly started from the London Market.
From London, these innovative measures began to spread on a global level; the insurance industry eventually became into the global colossal it is today- significantly surpassing its initial purpose as a mere tool for international trade facilitation, and essentially becoming one of the UK's most profitable exports in itself.
London's consequent expertise in the sphere of insurance law meant that the UK market was able to secure an optimal level of international monetary opportunities in global markets, a trend which significantly proliferated from the early 1800s onwards.
Having said that, the UK's insurance industry is at the moment just as important to Britain and all of its global client countries as it has been at any other specified time in its 400 year history of unrivaled performance.
Currently, the industry employs approximately 300,000 persons within the UK, which- albeit arguably seeming rather small in comparison to the financial or legal sector, allow the industry to generate over £10B in taxation revenue every year and manage investments that exceed £2 trillion. This is a testament to the fact that the insurance industry has retained its position as one of the UK's finest 'jewels', as well as one of its most important economic drivers.
Brexit & The Insurance Industry
With the United Kingdom's controversial departure from the European Union, the nation has inadvertently entered into a fresh new stage in its lucrative history. International commerce is heavily driven by the development of innovative commercial relationships and trading opportunities around the world, and this is no doubt a sector where the UK's insurance industry thrives in.
London's insurance firms have consistently adapted to external economic changes for hundreds of years, and consequently this new environment of complex trading policies and product lines is unlikely to deter them from maintaining their 'world class' standard.
The sector's attempts to grasp some of the world's most fruitful commercial opportunities is in line with their desire to address some of the bigger issues that our world is currently facing in 2021. The aforementioned expertise and unparalleled knowledge that London's insurance companies possess can significantly help tackle: changes to climate change, and the effects of the post COVID-19 era.
In fact, industry analysts have highlighted that this is an opportunity that can further exemplify the sector's persistent global relevance and importance, and elevate its value to exceed that of a mere commercial one.
Britain's constantly changing ecosystem, its expertise, and its mature market likely have placed it in a perfect place to tackle challenging and highly complicated risks.
Home of Llyod's of London
Lloyds- the world's largest insurance market, originally started out in the city of London. Even though it now operates in over 204 countries around the globe- providing specialist underwriters and brokers, as well as over 4,000 local coverholders, it initially started out from Edward Llyod's small coffee shop in the 17th century, which eventually expanded into the pioneer of insurance law that we know today.
In the 1900s, Lloyd's segued away from specialising solely on maritime law, and began encompassing broader, general liability insurance.
Final Take: Industry Projections
As London has bet against Europe and all for Asia and the developing world, the next 5 years will be interesting. In 2020, the London Market saw an approximate 10 percent increase in the commercial insurance premiums that were written from 2018 onwards.
The London Insurance industry's unrivalled specialism, brilliance, and reliability have allowed it to place itself in a position where it can insure practically any activity, in any location around the world. To this day, London remains the only location in the entire world where every top 20 insurance firm (and re-insurance firm) is still active, which has further propelled its global presence.