Positively stable - London Company Market report overview

Date published

30/11/2017

Services

Sectors

The International Underwriting Association has released its Annual Statistics Report into the London Company Market (LCM) results for 2016. As 2017 draws to an end, we briefly outline below, for those who do not fancy pages and pages of statistics, the LCM’s performance highlights, its key results and trends by class of business, and broadly consider the movement of the London Market by reference to Lloyd’s Annual Report 2016 and the London Matters 2017 Report.

Highlights

  • The LCM has remained stable, with income from business underwritten in London in 2016 remaining generally in line with figures recorded in 2015.
  • Significant revenue growth of 35% was seen in the LCM’s non-traditional lines.
  • £7.383 billion of premium - just under one third of the total underwriting income of the LMC - has been identified as being written by insurers and reinsurers who may require a change to their regulatory status post Brexit.
  • Business in the UK and Ireland remains the largest source of income for the LCM with business written in London accounting for 54% of premium.
  • Overall sentiment remains positive in respect of the London Market, as the London Market Group develop the new London Market Target Operating Model (LMTOM) to improve market access, efficiency and agility.

LCM 2016 results

The combined result

The overall stability achieved in 2016 is a positive outcome during a period in which a significant portion of the London Market’s resources have been directed towards planning and preparing for Brexit.

While roughly one third of the total £22.725 million in premium written and controlled by the LCM is written by firms that may require change in their regulatory status following Brexit, this does not appear to have discouraged placement in London. Indeed, while the LCM saw some decline in specialty lines, including marine and aviation, the London Market on the whole outperformed its global counterparts in 2016 and increased its relative share of income across many lines.

The strong results of both the LCM and Lloyd’s in ‘other’ lines (those falling outside the traditional categories) send a positive message in respect of the London Market’s capacity to harness new opportunities. We expect to see continued growth in non-traditional lines, particularly as new EU data regulations come into effect (which are likely increase the uptake in cyber products) and the LMTOM builds upon London’s long standing reputation for technical expertise and willingness to write risks by improving accessibility to, and the efficiency of, the market.

Related items:

London Matters 2017
London (still) matters: an updated perspective

Read other items in the London Market Brief - January 2018