Insurance was not to blame

The UK insurance sector was not to blame for the financial crisis, has socially useful products and should grow in the UK, the Times says.

The Times says: “It is hard to pin any blame for the financial crisis on British insurance companies (as opposed to their American rival, AIG, which had a starring role). And it is hard to deny that the products and services they provide are socially useful.

“Insurance is one of Britain’s great strengths. We have the third-largest industry in the world, behind the US and Japan. It employs more than 300,000 people, a third of all financial services jobs, and is a major exporter.

Insurance is one area of finance where this country should be looking to grow. And, as it happens, it is one area where there is a big opportunity.

Reinsurance opportunities

“Britain is relatively weak in reinsurance, the provision of insurance to insurance companies. No big reinsurer is based in the UK and, indeed, many British insurers have moved their reinsurance operations offshore in recent years, to low-tax locations like Bermuda. But the attractions of some of these centres are under threat. They could be badly hurt by global moves to clamp down on tax havens, and in particular by tax changes under consideration in the US.

The Times says next week, the ABI will call on the Government and regulators to work with the industry to boost the UK’s competitiveness because it takes months to set up a reinsurance company in the UK compared with just weeks in Bermuda.

Other issues such as tax and the lack of political support are also covered.