FTSE 100 insurance leaders have voiced concern over London’s position as a global financial hub in a post-Brexit world, after a recent survey and accompanying report from law firm DWF highlights doubts about the city’s ability to attract capital and talent once the UK leaves the European Union (EU).
While no one can be sure what the London and broader UK insurance, and wider financial services sector will look like in a post-Brexit world, the views of leaders of FTSE 100 companies provides valuable insight into the thinking of UK business leaders.
Conducted by international law firm, DWF, a recent survey shows that 81% of respondents believe that attracting capital to London will be harder after Brexit, with 75% expressing the same concern with attracting needed talent, an area London has always excelled in.
Importantly, the concerns were also shared by insurance leaders surveyed by DWF. With concerns being raised about attracting capital and talent, as well as the adverse impact on investing in their respective London operations should the UK lose its single market access.
“Insurers have a considerable presence in the FTSE 100 and their concerns about technology and access to capital and talent should be strongly noted. A reduction in the supply of these key elements will limit their ability to operate and may, in turn, reduce London’s role and influence in the global insurance market,” said Caroline Coates, Head of Insurance Sector, DWF.
Regarding technology, and the rise of InsurTech, as much as 88% of insurance leaders feel that technology innovation is vital to business strategies moving forward, which was actually the highest of all sectors surveyed.
Considering the strong focus on technology and innovation across the insurance and reinsurance industry in recent times, as new players look to disrupt the market and partnerships between traditional players and tech companies come to fruition, the accepted need to embrace technological innovation isn’t too surprising.
But increasingly, it appears, London’s position as a global hub is coming under threat. Although the survey reveals that London’s connection to other cities around the world and the fact it’s Europe’s main financial centre, for the time being at least, are key reasons firms look to set-up shop in the UK, other cities are seen as a real and growing threat.
Insurers surveyed highlighted Amsterdam, Singapore, and New York as the greatest competitive threat to London.
A number of industry leaders and insurance sector organisations have, in recent times, underlined the importance of the London insurance and reinsurance market maintaining its competitive edge when the UK leaves the EU, amidst reports of global reinsurers increasingly taking a market share from London.
London will need to innovate and embrace change to ensure it remains an attractive place for capital and talent in the months and years ahead, so it’s promising that so many survey respondents believe that technological innovation is going to be vital over the next five years