The UK insurance industry would like to see the government commit to developing an insurance-linked security (ILS) market in its next budget, according to Colin Graham, UK insurance tax leader at PwC.
In the Autumn Statement of 2014, the government announced it would explore options to ensure that the UK’s regulatory and tax regime is “as competitive as possible” in order to remain an attractive domicile for the transaction of reinsurance business.
The interim findings from this review will in the budget, but Graham stated that no major concessions to the insurance industry are expected in a pre-election budget.
In addition to an ILS commitment, Graham also claimed that the UK insurance industry would like to see specific tax measures introduced to address the unique costs associated with the volatility of results in the sector.
Graham said: “Insurance companies will be looking for signs of government’s commitment to keeping the UK an attractive place for insurance companies, from start-ups to big groups.”
“There are some concerns, such as whether the diverted profits tax will apply to more than just the contrived arrangements it is targeting.”
