It would be nice to find out what the comparison in size is between the wholesale UK insurance industry/market and wholesale banking in the UK. I’ve been searching everywhere, but have come up blank.
The one statistic I’ve found so far, from the Association of British Insurers (ABI) is this: insurance controls around 13.4% of investments in the London stock market. This compares to 12.8% held by company pension funds, 3.5% by banks, 1.8% by unit trusts, and 10.0% by other financial institutions.
Yes, this week I’m still grumbling on about the lack of awareness in the sector. People understand the difference between retail and wholesale banking, but the message doesn’t seem to be getting through about insurance. This isn’t just a PR issue for general insurance (and the reinsurance sector needs help with PR though the tide is turning there), it has considerable implications for staffing, recruitment, awareness, CSR and other aspects of insurance.
How ignorant are people about insurance?
This sweeping ignorance goes right up the corridors of power. Take David Cameron’s Lord Mayor’s Banquet speech in November last year in which he promised to promote the City of London’s financial sector. Insurance got half a sentence. “From Lloyd’s of London, the world’s first insurance market for trading in the 17th Century to the first international trading companies own by shareholders in the 18th century.” Click here for the speech in full.
From the same ABI report, I mentioned there are some more interesting stats. The data is a bit old, published in 2011 and from 2010, but while it covers all kinds of insurance, it does not break data down into Life and non-Life etc. Nonetheless, it does show how vast this sector really is.
How big is the UK insurance industry?
The ABI report states: “The UK insurance industry is the third largest in the world and the largest in Europe. It is a vital part of the UK economy, managing investments amounting to 26% of the UK’s total net worth and contributing £10.4 billion in taxes to the government. Employing around 290,000 people in the UK alone, the insurance industry is also one of this country’s major exporters, with 28% of its net premium income coming from overseas business.”
- Insurance employs around 290,000 people. This is more than a quarter of all financial services jobs, and twice as many as are employed in the combined electricity, gas and water supply sectors
- Insurance is responsible for investments of £1.7 trillion, equivalent to 26% of the UK’s total net worth
- Insurance is a major contributor to the UK’s tax take. In the 2010/11 tax year, ABI members contributed £10.4 billion in taxes, equivalent to 1.9% of total government tax receipts. Of this, £2.7 billion was corporation tax and £1.6 billion was insurance premium tax
- Insurance is a major exporter – 28% of its net premium income comes from overseas business. Premium income from overseas is £56 billion, of which £42 billion is long-term business and £14 billion is general business
It’s time to #goinsurance
I also have a favour to ask. There is a mini-campaign on twitter and we’d like you to sign up to it and start using it. Started by the Geneva Associationr, and boosted by a series of articles in Insurance Day, using the hashtag #goinsurance. (A hashtag is what you use on twitter to “bookmark” information you are interested in – more on this in another blog post). Basically, it is trying to promote insurance as a good sector to work in and that is good for the global economy. It has not gained a great deal of momentum – yet. Let’s see what we can do to help it on its way. #goinsurance!
