Insurers are central to the competitiveness of the UK’s financial and related professional services industry, but a report from TheCityUK and PwC UK warns that lagging insurance processes and market infrastructure threaten that position without urgent modernisation.
The report draws on insights from over 300 senior leaders – including 70 CEOs and Chairs – from across the UK’s financial and related professional services sector, as well as functional experts, academics, regulators, government, technology leaders, disruptors, and think tanks. These perspectives were combined with PwC’s economic modelling and international benchmarking.
According to the report, much of the UK’s international competitiveness depends on its ability to insure, price, and share risk at the pace modern-world shocks demand.
Findings showed that, while overall Gross Value Added (GVA) in financial and related professional services has largely flatlined since 2014, the re/insurance and pensions industry has grown by 38% over the same period.
The analysis positioned insurance as central to national resilience, underpinning everything from infrastructure and energy security to defence, technology, and business investment. It stressed that growth requires risk-taking – and insurance enables it.
However, the report warned that the UK cannot remain competitive if insurance processes and market infrastructure lag behind the risks they are meant to manage. Fragmented data, slow customer journeys, and legacy systems widen protection gaps – particularly for SMEs and households – and slow recovery after shocks.
As a result, there is an urgent need to modernise the insurance market’s underlying infrastructure. This is essential both for national resilience and for sustaining the UK’s broader financial leadership. That includes insurers playing a key role in shaping Open Finance and digital identity so key requirements around consent and detail and use of data don’t default to bank‑led models.
The firm’s also noted that if the UK falls behind in digitisation and interoperability, the mechanics of conducting business internationally will become increasingly difficult.
It highlighted that London’s specialty leadership is one of the UK’s true strengths – but it is not guaranteed. The report called for scaling ILS, captives, and alternative risk transfer, backed by proportionate wholesale regulation, predictable tax, and faster execution. For systemic risks such as cyber, it pointed to the potential of public–private risk‑sharing, building on UK precedent. The report reinforced that the recent momentum around captives and ILS is welcome – but pace now matters if the UK is to keep up with faster-moving centres.
Anne Richards DBE, Chair of Project Steering Committee and Chair of TheCityUK Leadership Council, said, “The UK’s financial and related professional services industry is a strategic national asset that cannot be taken for granted. While professional services and insurance are outperforming, the industry’s growth overall has flatlined. We are at a critical juncture. The message from industry leaders and stakeholders is clear: build on the positive approach in place to reform the system, but do it faster, with greater ambition and with targeted execution.
“It has never been more urgent for industry, government and regulators to act together to unlock growth and drive innovation. This is an industry that delivers value right across the economy and society. If successful, the UK will become more competitive and appealing for investment, businesses, and talent, benefitting people nationwide.”
Darren Ketteringham, UK Financial Services Leader, PwC UK, commented, “Our financial and related professional services industry is built on qualities others strive to emulate: deep expertise, openness, and a relentless ability to reinvent. It is more than an industry in its own right; it is a multiplier of opportunity that fuels growth across the whole country. But our modelling is unequivocal. Without substantive action, the UK’s financial services industry will shrink as a proportion of national output.
“Other financial centres are closing the gap with the UK and technology has reset the terms of competition. Industry leaders are clear. We must make bold decisions now on how we harness technology before others who are moving with greater ambition and speed to lock in a competitive advantage. Adopting AI, leading on tokenisation and building the market plumbing to underpin this will be critical to securing the UK’s position as a leading financial centre for decades to come.
“Staying ahead requires constant transformation and this is a make or break moment. With shared clarity and confidence in the path forward, we can unlock the £53 billion economic opportunity and put the UK decisively back at the frontier of global financial services.”
Simon Westcott, Strategy & Financial Services Leader, PwC UK, stated, “Financial markets of the future will run 24/7, cost less to access, settle instantly and open up far more opportunities for people and businesses. Imagine buying a home in days rather than months, automatically getting the best rate on your savings, or being able to invest in any asset in seconds.
“To get there, firms need to invest now in the technologies that will power this next generation of finance. Industry is clear: the systems behind this must work seamlessly together – at home and across borders. We need joined‑up connections between industry, government and regulators to build infrastructure that speaks the same language internationally.”
Lucy Rigby KC MP, Economic Secretary to the Treasury, added, “The UK’s financial services are the jewel in our economic crown. This Government’s ambitious reform agenda is designed to unleash the full potential of the sector including by ensuring regulation is fit for purpose, backing innovation and ensuring that we retain our competitive edge. I welcome this report from TheCityUK and PWC – its urgency and ambition is a shared one across both Government and industry.”
