Simon Kirby, Economic Secretary to the Treasury (City Minister) at HM Treasury, has stressed that the UK government’s proposed insurance-linked securities (ILS) regulations can help the London insurance and reinsurance market maintain its competitive edge.
Addressing an audience at City & Financial’s ILS conference held in London on December 5th 2016, Kirby highlighted the importance of the UK insurance and financial services businesses, noting that the addition of ILS on its shores will support its competitive advantage.
Since the UK voted to leave the EU earlier in 2016, there has been widespread uncertainty about London’s ability to maintain its position as a leading hub for global financial services, including its insurance and reinsurance sectors.
Kirby sought to reassure the audience, noting a desire to innovate and collaborate with all industries, including the risk transfer world, in order to help London maintain an edge on its global competitors.
“We know how important this industry (insurance) is, we want to support you, and we’re taking through these measures on ILS to help you stay ahead of the game. And my door at the Treasury will always be open to your ideas and what else we can do to make this market vibrant, dynamic, and successful,” said Kirby.
After requests from the insurance and reinsurance industry to enable the facilitation of ILS in the UK, Kirby explained that the government didn’t want to miss an opportunity to ensure London’s insurance sector stayed at the cutting edge of global insurance.
The London marketplace, which includes the specialist Lloyd’s of London insurance and reinsurance market, is home to a broad and diversified base of skilled risk transfer expertise, “and by this time next year will already have another string to its bow” with the addition of ILS, said Kirby.
As noted by Artemis previously, the UK’s ILS regulations are expected to be in place in the first-half of 2017.
“I want this to be the beginning of a drive for innovation to unlock the potential of ILS through the London market. One thing I think we can be certain of is that our insurance sector will give us edge to keep its position as one of the world’s very best,” said Kirby.
The consultation process remains ongoing and Kirby, along with other conference speakers urged for continued dialogue between the risk transfer industry and the UK government.
“Although the project is not yet finished, I want it to stand as an example of how the insurance industry and the government can create innovative solutions together.
“So let’s continue together to be proactive, collaborative and constructive, so we can get the very best of the deal,” said Kirby.
Only time will tell how successful the UK will be at attracting ILS business to its shores, and until the regulation is passed it’s vital that the industry and the government work together to ensure London has the best chance of succeeding, and ultimately becoming a valuable hub for global ILS business.
It’s promising to hear that the government is welcoming widespread feedback from across the industry about how to best incorporate ILS into the UK’s insurance industry, and open to creating innovative solutions that benefit both the UK and global economies.