Premium income for the London company market jumped by 20% in 2020, a new report by the International Underwriting Association (IUA) has revealed.
Large commercial and wholesale risks worth £27.976bn were written in the City last year, with a further £5.162bn completed in offices elsewhere, but overseen and managed by London operations. Combining these two figures gives an overall intellectual and economic premium of £33.138bn, up from a figure of £27.633bn in 2019.
The IUA’s London Company Market Statistics Report shows the significant growth in income spread across all major business lines and geographic territories written in London. Direct and facultative contracts now account for over 80% of all company market premium written in the City. Continued company restructuring necessitated by Brexit, however, led to another large fall in premium written across Europe and reported back to London.
Dave Matcham, Chief Executive of the IUA, said: “The London company market has returned another strong performance as business continues to grow. Our report does not assess claims data and cannot, therefore, be a measure of profitability, but it does confirm our sector as a substantial centre of insurance and reinsurance expertise.
“A favourable rating environment has helped both the renewal of existing contracts and new business acquisition. Despite the constricting influence of the Covid-19 pandemic the company market has expanded overall with 2020 representing a first year of substantial business for certain new entrants.”
Last year’s edition of the IUA’s annual statistical survey detailed a large impact on premium earned as a result of the UK’s decision to leave the European Union. Controlled premium overseen and managed by London operations fell by 30% from £8.877bn in 2018 to £6.197bn in 2019. That trend has continued with the total declining by a further £1bn in 2020, as more firms completed arrangements to accommodate the new political reality.
The new London Company Market Statistics Report also delivered evidence of business being transferred from the Lloyd’s market. Around half of the IUA’s 71 members also operate a Lloyd’s platform. The trend is particularly noticeable for marine and aviation contracts where, for the first time since the survey began 11 years ago, business recorded by IUA members now exceeds that for Lloyd’s managing agents. Similarly, using the same comparative formula, the company market is now also recording a higher total for liability business than Lloyd’s.