London ‘getting its mojo back’ in reinsurance, says LMG’s Wagstaff

The London Market Group (LMG) is looking to build on several years of government lobbying, with the planned UK captive insurance regime providing a significant success story, according to chief executive Caroline Wagstaff, speaking to GR at the RVS 2026 reinsurance event in Monte Carlo.

Maintaining relationships with government has been complicated by political turnover in recent years, Wagstaff (pictured) acknowledged, having worked with 10 economic secretaries at the Treasury during her five years in the LMG role.

“The revolving door is unhelpful when you’re trying to build relationships, particularly when you’re talking about quite complicated issues,” she said.

Wagstaff welcomed the return of Lucy Rigby MP as economic secretary, noting Rigby already has experience and knowledge working with the London market and attended the launch of the latest “London Matters” report.

“If I were to put an overarching headline on our lobbying, it’s continuing to build on foundations that we’ve been talking about for a number of years, rather than particularly starting anything new at the moment,” Wagstaff said.

That includes completing work on the UK captive domicile, where the Prudential Regulation Authority (PRA) has published its consultation.

“That’s been really well received in the market. It’s very ambitious. They seem to have heard what the market said about the way they need to regulate that for it to be successful,” she said.

Wagstaff suggested the logic for London is not simply about retaining primary premium, hence the enthusiasm for captives.

“One of the ministers once said to me, ‘Why is the London insurance market lobbying for something that takes premium out of the insurance market?’”

Her response was that “the boat has already sailed”, with captive insurance already a huge global market.

“Secondly, if they do it in London, they’ll probably reinsure it in London. If they do it in Bermuda, guess where they’re going to reinsure it?”

Recruitment and the AI challenge

Talent remains another major concern for the LMG, with Wagstaff warning that the soft market could reduce the number of younger employees entering the sector.

“The real trigger event at the moment is the soft market cycle, because 50% of the young people who come into the market come into the broking firms,” she said.

“And who is it that’s first hit in a soft market cycle on their P&L [profit and loss centre]? It’s brokers because they get paid a percentage of the price, and so they slow down their recruitment because they can see their income going down.”

Artificial intelligence (AI) and outsourcing trends could compound that pressure by removing or reshaping many of the repetitive tasks traditionally undertaken by junior staff, and which have provided much of the early career experience of generations of re/insurance professionals before taking on more senior roles.

“I don’t know what I’m going to get young people to do,” Wagstaff recalled one industry figure telling her. “If they’re not going to be filling out Excel spreadsheets or whatever people used to do in order to learn underwriting, this is a hard conversation.”

She argued that businesses should move away from thinking about existing job titles and instead identify the capabilities they will need in future.

“The challenge, I think, for businesses is to stop thinking about jobs and roles and start thinking about what skills they need,” she said.

The market has adapted to technological change before, Wagstaff emphasised, but the speed of AI adoption makes the success of the current transition particularly important.

“I think the market can do it,” she said. “But I worry that if we don’t do it at speed, we’re going to end up with this hole of young talent for about two or three years. It’s going to become a real problem in 10 years’ time.”

London market confidence

Alongside politics and talent, Wagstaff said a third major strand of the LMG’s work is promoting London and encouraging the market to be more confident about its strengths.

Recent “London Matters” data has provided grounds for optimism, particularly in reinsurance.

“Reinsurance, which had been shrinking and static for the last decade, actually grew in the last two years,” she said.

Wagstaff suggested the shift partly reflects renewed demand for specialist expertise rather than simply larger line sizes.

“I think people are coming back to London for those specialist solutions, those specialist expertise that has always been there in insurance,” she said. “But I think they’re coming back for it to reinsure it.”

She also pointed to new reinsurance businesses launching in London as evidence of the change in direction.

Overall London market share has grown in recent years, she said, but the reinsurance improvement is particularly notable because previous gains had largely come from insurance.

“The drum to be banged is that London’s getting its mojo back for the reinsurance market,” she added.