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The London Insurance Market

What is The London Insurance Market

The London Market is a distinct part of the U.K. insurance market, primarily based in the City of London. With its internationally recognised insurance expertise, The London Market plays an important role in the UK economy 

It is made up of:

Insurance companies – Several ABI members are involved in the London Market. They predominately offer commercial insurance, often against worldwide risks, such as earthquakes (see below) and reinsurance (see below). Some may also offer personal insurance, such as home and motor.

Reinsurance companies – these firms provide insurance cover to insurers to help them limit their loss from a major event, such as a natural disaster, like hurricanes, earthquakes or a major terrorist attack.

Lloyd’s of London. Lloyd’s is not an insurance company but is a marketplace in which syndicates made up of individuals and corporations (known as ‘members’) offer insurance. Syndicates are managed by teams of managing agents. 

Marine Protection and Indemnity Clubs (P&I Clubs), Protection and Indemnity insurance, or as it is more commonly known, P&I, covers ship owners against risks such as liability for collisions, property damage, pollution, environmental damage and removal of wrecks. 

LondonLondon Market - What risks are insured

The London Market specialises in insuring large-scale commercial, often complex, international risks. These include cover against:

  • major natural disasters, such as hurricanes, earthquakes and floods,
  • aviation insurance, including aircraft, airports and space satellites
  • marine, including covering the vessel and its cargo
  • the energy market, ranging from oil rigs and refineries to emerging renewable energy ventures
  • specialist individual body parts cover, for example insuring singers’ voices

Who can arrange insurance in this market

Insurance is often arranged in the market by insurance brokers. 

How the ABI is supporting and promoting the London Market

The ABI is actively involved in many of the issues impacting London Market companies, including Brexit, building regulations, terrorism insurance and tax reform.

ABI Commercial Lines and London Market sets out the range of the ABI’s involvement in many of the key issues.

These include:


BrexitThe ABI is working to ensure the priorities of the insurance industry are reflected as the Government prepares for Brexit. While we remain vocal about the need to avoid a no deal, we are working with our members to prepare for such an eventuality, and alerting consumers on the potential implications.  

Commercial property

Towards better fire safety regulations. The cost of fire claims to the commercial property and London Market insurers is a significant issue. The ABI has long called for an overhaul in building fire safety regulations, and since the Grenfell fire in 2017, this call has intensified. The Government has said that it will ban combustible cladding on certain high-rise buildings, and we continue to call for this action to go further. For more information- add link to above publication 

Terrorism and Pool Re. The ABI and Pool Re successfully lobbied the Government to extend the reinsurance cover to include non-damage business interruption following a terrorist attack.

Commercial Motor 

Discount Rate. The ABI’s extensive engagement with Government led to the Civil Liability Act, which brought forward changes to the framework for setting the Discount Rate. Positive aspects of the new rate review process include the assumption that the claimant’s investment approach will involve more than a very low level of investment risk and the certainty of a regular review of the Discount Rate every five years.

CarWe were however, disappointed at the outcome of the first review process given that the Lord Chancellor has used the discretion permitted in the Civil Liability Act to reduce the Government Actuary’s Department recommendation by 50bps so the claimants are twice as likely to be over-compensated than under-compensated, which the Lord Chancellor describes as “a reasonable additional margin of prudence”.

Cyber insurance

CyberWe are committed to supporting the sustainable growth of cyber insurance among UK and global businesses. We continue to make the case to Government and the Information Commissioner’s Office (ICO) for insurers to have access to privacy breach data reported to the ICO under requirements in the General Data Protection Regulations.


Insurance Premium Tax (IPT). With a doubling of the rate of IPT since 2015 to 12%, we are arguing that the rate of this tax should now be cut. This would give a welcome break, to responsible individuals and firms who have taken out insurance.

Digitalisation challenges. The primary focus is the Organisation for Economic Co-ordination and Development (OECD) programme of work on the tax challenges arising from the digitalisation of the economy. We have led the insurance industry response and have produced a position paper on Pillar 1 of the programme, detailing why insurance should not be included in the current OECD proposals. 

US Tax Reform. The ABI continues to lobby the US authorities for net treatment for reinsurance to avoid the risk of double taxation on reinsurance contracts, under the Base Erosion Ant-Abuse Tax


We are in regular contact with the Government for help to bring down regulatory barriers and open up markets. This includes, working with the London Market against regulatory barriers on issues, such as data retention in South Korea and onerous requirements on foreign reinsurers in Canada.

We are working closely with the UK Government on their international strategy for financial services’ advising on how to maximise opportunities for insurers and reinsurers in their five priority markets, such as supporting the growth of cyber insurance.