The London Insurance Market is a distinct, separate part of the UK insurance and reinsurance industry centred on the City of London. It comprises insurance and reinsurance companies, Lloyd's syndicates, P & I clubs, and brokers.
Whilst there is no watertight definition of the market, there is general agreement that the core of its activity is the conduct of internationally traded insurance and reinsurance business. This is mostly non-life (general) insurance and reinsurance, with an increasing emphasis on high-exposure risks. There is also, however, a significant amount of life reinsurance activity in London.
Despite the growth of other international centres, London retains its position as the world's leading international insurance and reinsurance market. There may be far fewer companies and Lloyd's syndicates operating in the market than in the late 1980s, but their average size has increased, and so has the overall level of business.
The London Insurance Market's international character is reflected not only in the sources of its business but also in the nationalities of its participants and their ultimate owners. A majority of the companies underwriting in the London insurance Market are foreign or foreign-owned. It is still the only centre in which all of the world'd 20 largest reinsurance groups are represented.
An important competitive strength of the London Insurance Market lies in the number, diversity and expertise of the insurers competing here. Brokers can find capacity and expertise required for the underwriting of virtually any type of risk. Brokers control most of the business placed in the market. With the exception of certain risk types, London is largely a subscription market where risks are shared. Historically, a key feature of teh subscription market is the presence of highly skilled "Lead Underwriters" whose judgement on premium rates to be charged for different risks are followed by other insurers in London and indeed other markets across the globe.
Another important attribute is geographical concentration with many insurers and intermediaries located in close vicinity within the City of London. Modern technology has streamlined business processing and made the procedural and operational requirements to operate businesses considerably easier than in the 1980's however, you cannot beat face-to-face meetings which allow you to read body language, form relationships and build on your networking capabilities.
In such an arena brokers, intermediaries and introducers can quickly measure the strengths, specialities and reputations of the Lloyd's and Insurance Company Underwriters whom they deal with and readily tap the combined underwriting capacity for all sectors of the market.