The UK insurance industry has exhibited its strong strength against the global economic slowdown by recording general insurance net premium of £34 Billion in 2008.
According to the Association of British Insurers (ABI), the insurance sector in Britain firmly rooted to its place despite heavy storm of recession that shook the global economy, as reported by
Insurance Daily.
Net premium income from general insurance jumped 3% to £34 Billion in 2008, while premium income from overseas operations grew 13% to £54 Billion.
Insurance companies pay out around £300 Million to customers each day. Of the total payment, £239 Million is paid in the form of pension and life insurance benefits and the remaining £57 Million is given in general insurance such as household and motors claims. The Association further revealed that long term premium income in the year 2008 became the third largest over the last decade in spite of drop in life and pensions new business.
Industry pundits believe that the UK insurance industry will continue to progress decently even in tough economic conditions emanated from the global recession, but insurers need not to be complacent at any stage. The competitiveness of the sector should be maintained in order to retain its strong global position.
The Association has claimed for the reduction in corporation tax with the improvement in fiscal conditions. It also proposed for the corporate tax exemption in order to encourage companies having branches overseas open their more headquarters in the UK.
Over 80% of executives in the insurance industry have a common view that insurers will continue to leave the UK unless the government make tax system less anti-competitive because rise in upper rate of income tax bracket to 50% and changes to pension tax relief create a lot of problems for the insurance companies.
Moreover, the trade body has proposed that a link between personal taxes and competitiveness should be recognized. This ensures that any tax change in reaction to Solvency II will lead to stable and sustainable system and the necessity of tax loss system to deal with the volatility of insurance results.
According to a Research Analyst at
RNCOS, “UK will remain market leader in the insurance sector provided competition is stifled by introducing legislation. Proposed regulation should strike balance between proportionate consumer protection and competitiveness of the sector. This will help the industry to smoothly follow the track of innovation and provides reliable products to millions of families and businesses.”
Related Market Research Reports:
