Briefing: Major insurer snubbing LSE for Wall Street is setback for UK

By news editor James Cowen

Aspen Insurance wanting to list on the New York Stock Exchange (NYSE) is a setback for the London Stock Exchange (LSE).

On Monday (6 January 2025), the specialty insurer confirmed that it had filed paperwork with the US Securities and Exchange Commission regarding an initial public offering (IPO) on Wall Street.

An IPO is when a private company sells shares to the public for the first time on a stock exchange.

Aspen Insurance is making this move after being taken private in 2019 by private equity (PE) firm Apollo. However, its decision to prepare for a New York listing flies in the face of reforms introduced in July 2024, designed to attract companies like Aspen Insurance to the LSE.

These changes included making it easier for firms to access capital and liquidity in the UK, to help companies join markets without facing unnecessary barriers.

Also in July 2024, the FCA set out a simplified listings regime for businesses seeking to list their shares in the UK.

These new rules remove the need for votes on significant or related party transactions and offer flexibility around enhanced voting rights.

Increased opportunities

These are the biggest changes to the listing regime in over three decades – the FCA believes the amendments facilitate increased opportunities for investors and more support for firms.

Sarah Pritchard, executive director of markets and international at the FCA, said: “A thriving capital market is vital in delivering investment to growing companies, plus returns and choice to investors.

“That’s why we are acting to make it more straightforward for those seeking to list in the UK, while retaining vital protections so investors can help steer the businesses they co-own.”

Speaking with The Trade last July, Charlie Walker, deputy chief executive at the LSE, added that the reform agenda presents a more “holistic assessment” of what makes up UK capital markets.

He said: “There is sometimes the temptation to look at the UK capital markets through a narrow lens – for example, of just a set of listing rules or just secondary market trading dynamics.

“However, the reform agenda is a more holistic assessment of all the components that make up the UK capital markets, with the objective of being able to support the growth of UK companies and maintain London’s position as a global financial centre on which the UK economy also relies.”

Credible opportunity

Given these moves to entice firms to the LSE, it is a setback that Aspen Insurance has chosen the NYSE for its IPO, with it hiring investment banks Goldman Sachs, Jefferies and Citi to help it get listed on Wall Street.

While you could argue that the firm had previous experience of being on the NYSE before being taken private, according to The Telegraph, 524 of Aspen Insurance’s 1,053 global staff are in Britain versus 426 in the US.

This demonstrates the importance of having a presence in the UK – and when you combine this with the work that has gone into revamping the LSE, listing in London would have been a credible opportunity.

Therefore, despite Aspen Insurance snubbing the LSE, it could still prove to be an attractive option for other private insurers looking to go public.