30 Nov 2011
The Lloyd’s of London insurance market has weathered the financial crisis well but it faces challenges over the next three years from growing regulation and the rise of new regional insurance hubs, the group said.
Lloyd’s plans to lobby against excessive regulation while ensuring that it can provide access to competing insurance centres such as Singapore where necessary, it announced recently in a strategic review that recommended no major changes.
Lloyd’s warned that new regulations and taxes imposed in the wake of the financial crisis could erode London’s status as a global financial centre, making it more difficult to recruit highly-skilled insurance workers.
“International competition, higher tax rates and increasing City regulation have put London’s position as a global financial centre at risk,” Lloyd’s said.
The group urged insurers “to guard against being burdened with inappropriate and potentially damaging regulation primarily intended for the banking sector.”
Lloyd’s, which traces its origins back 322 years to a London coffee house where wealthy merchants sold shipping insurance, also singled out the EU’s forthcoming Solvency II capital regime for insurers as a potential threat.
Lloyd’s, a network of over 80 competing syndicates that provide specialist insurance on assets ranging from oil rigs to celebrity body parts, also said it expected insurance prices to remain generally weak over the next three years, blaming stiff competition between well-capitalised insurers.
The group’s profit rose 40 percent to £1.32bn ($2.06bn) in the first half of 2009, boosted by lower insurance claims and better investment returns compared with a year earlier.