The London insurance and reinsurance market need to build on the success seen with the Lloyd’s insurance-linked securities structure London Bridge 2 PCC, as ILS remains a real opportunity to support market growth despite the UK ILS regime having stalled, Chris Lay, Chair of the London Market Group (LMG) trade body has said.
That’s not to say a lack of ILS activity outside of Lloyd’s London Bridge 2 PCC structure has held the London market back.
The LMG reports that the London Market has doubled in size over the last roughly 10 years, to represent $187 billion in GWP, up 17% from 2022.
As a result, insurance and reinsurance in London now contributes £61 billion to overall UK GDP and 37% of “City” GDP, up from £49 billion in 2020.
Despite London lagging some global competitor jurisdictions, it has outpaced the global market growth to reach an 8.7% share in 2024 and is larger than all other global hubs combined, the LMG estimates.
Chris Lay, Chair of the London Market Group, stated, “London remains the global leader in risk transfer, demonstrated by its growth in absolute size and market share. Yet we cannot be complacent as, whilst much smaller than London, some other jurisdictions have grown faster in recent years.
“To reinforce our position, the London Market needs to focus on three core things: making our market an attractive place for new capital; targeting opportunities to cover new threats on the risk landscape, including AI, energy infrastructure and intangible assets, along with the continuing opportunity for growth in cyber; and, finally, investing in the quantity and quality of young talent to allow the industry to expand. Our data points to an alarming shortfall in this third area.”
London’s track-record for innovative thinking is seen as a key driver for insurance and reinsurance market growth there.
But, when it comes to bringing in new forms of capital and hosting insurance-linked securities, it is still seen as lagging, but with London Bridge 2 PCC seen as the one bright spot.
The London Bridge 2 PCC structure was established in August 2022. Since then there has not been another regulated ILS focused structure registered in the United Kingdom.
New capital is still required, to support capacity to fuel market growth, the LMG believes.
The London Matters reports highlights “a need for diverse sources of new capacity to underwrite the growing level of risks and help bridge protection gaps.”
London Bridge 2 PCC has grown at a roughly 150% per-annum rate, to reach around US $1.9 billion of capital deployed. But this is just circa 2% of global alternative capital, the LMG estimates.
Lay said, “The London Market was not present in the alternative capital space prior to 2022. While the UK ILS regime has stalled, the success of London Bridge 2 has demonstrated that London can efficiently connect investors to diversified risks.
“It is clear that the London Market needs to build on this success and do more to attract alternative capital through structures such as captives and ILS. There is a real opportunity here, and the government and regulators are crucial to the process of simplifying access, streamlining processes and promoting our market as a great home for external capital.”
London Bridge 2 PCC, the Lloyd’s of London insurance and reinsurance market’s insurance-linked securities structure, has been very active bringing new capital into the marketplace through the fourth-quarter of 2025.
As we reported, the risk transformation vehicle opened 14 cells in Q4 2025, with around $660 million of new capital brought into the Lloyd’s market.
The UK government regulator is progressing plans for enhancements to the UK ILS regime, to make it simpler to use and encourage more issuance activity in the country, having confirmed new shorter timelines and launched a consultation on improvements.
In addition, the regulator is looking at the potential for the UK’s insurance special purpose vehicle (ISPV) or ILS structures to play a role towards bringing in alternative capital to support life risks and reinsurance in the UK.
So efforts are ongoing to enhance the UK’s ILS regulatory regime and encourage more ILS vehicles and transactions there.
But, the LMG sees these efforts as still stalled and despite the success of London Bridge 2 PCC the trade body wants to see faster progress to enable London to capitalise on growing global insurance-linked securities market activity.
