In a speech to the House of Lords, given as part of a discussion on “London as a World Financial Center,” Lord Peter Levene stressed the financial health and leading position of both London and the Lloyd’s market. He took the opportunity to remind his fellow peers of the importance London’s financial community plays in the U.K.’s economy and the need for support from the government.
He said Lloyd’s past difficulties were now well behind it, and presented some statistics to prove his case. “Collectively, the UK insurance market is the largest in Europe and the third largest in the world after the US and Japan but,” Levene stated. “But, if we ignore domestic business, the London insurance market is the world’s largest international center for both insurance and reinsurance, with premia in the London market now exceeding £21 billion [$38.7 billion] per annum, over half of which is placed with Lloyd’s.
“The London market today insures 15 percent of the world’s marine market and nearly 30 percent of the aviation market. At Lloyd’s, we insure many of the world’s leading companies, including 86 percent of the Dow and 89 percent of the FTSE100, two-thirds of the Fortune 500 Global Companies, 84 percent of Europe’s Top 50 and all of the world’s top 20 banks.”
After describing Lloyd’s participation in creating a homogenous European financial market, and its participation in major projects, including the World Cup, Levene took a swipe at one of his favorite targets – the U.S. Reinsurance Trust Fund.
“Lloyd’s largest market in the world is the United States of America where our business now amounts to some US$10 billion annually,” he began. “Surprisingly and unhappily, however, in the field of reinsurance in the United States, Lloyd’s is the largest victim of unjustified and discriminatory treatment. It is not what we expect from our largest trading partner and a country with which we have been doing business for more than 200 years and where, earlier this year, we marked the centenary of the San Francisco earthquake in which Lloyd’s played such an important and supportive role in its subsequent rebuilding.”
He also backed efforts to increase the competitiveness of the London market. While welcoming competition, Levene told the Lords that it “must take place on an even playing field, and more must be done in the UK to compete with offshore centers whose regulatory and tax regimes appear to the outsider to be more welcoming.”
He concluded his remarks with a plea for more support from the government. “Nationally, there are over 1 million people employed in Financial Services and, additionally, in central London more than 300,000 involved in supporting services from the legal and accountancy professions,” he noted. “The £18 billion [$33.16 billion] surplus on trade in financial services in 2004 was more than double that of any other country.
“I mentioned earlier the Chancellor’s recent initiative to establish a new City of London Task Force to promote Financial Services globally, to be backed up by a new business advisory council but, as the largest contributor to the UK’s GDP, it is disappointing and disturbing to note that when we look at UKTI, only just over 1 percent of their total program expenditure was for the support of Financial and Legal Services. We must understand about backing winners: this is our world class winner, let us do a lot more to back it.
“Here we do not need to worry about the condition of the metatarsal of one individual [referring to England’s injured striker Wayne Rooney]; we are blessed with a huge number of extremely able people from many different nationalities. We need to support them all and to let them know that their outstanding contribution to the national economy will receive the highest possible level of support.”
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