New research released today underlines the important role of foreign-owned companies in the UK’s investment sector and its popularity as a destination for investment from overseas. According to the UK Financial Services Ownership, Value and M&A report from TheCityUK, UK Trade & Investment and IMAS Corporate Finance, overseas owned firms make up over half (55%) of the UK’s large general insurance companies.
The report, produced by IMAS, reveals a financial services sector consisting of 50,000 entities and 3,400 different groups covering a broad range of businesses. Overall, insurance companies constitute one in five of all UK financial services companies. Despite the headlines being dominated by quoted UK companies, such companies make up a small amount of the overall ownership in insurance. The real story is one of overseas ownership of large companies (55%), valued at over £100m, and private ownership of small companies (62%), valued between £5m - £25m.
Chris Cummings, Chief Executive of TheCityUK, said:
“This report shows the strength of the insurance sector and its ability to attract overseas investment while maintaining a strong base of privately held businesses. The insurance sector is part of an industry that accounts for nearly 9% of the UK’s total economic output. Therefore it is vitally important, both to our financial services sector and the wider economy, that the UK continues to be open and attractive to inward investment.”
As in political spheres, a special relationship exists between the US and the UK’s financial services sectors. The research shows that the US is the biggest foreign investor in general insurance accounting for 40% of the total foreign investment overall, and is followed by Bermuda at 12%. Overseas ownership, which accounts for 25% of all general insurance companies, is most prominent in risk-carrying insurers.
Edward Oakden, Managing Director of Sector's Group, UK Trade & Investment, said:
“The fact that a quarter of all insurance firms are overseas owned clearly demonstrates the open character of financial services in the UK. The appeal of the UK as a place for financial services companies to do business can be attributed to our robust legal and regulatory framework, the expertise and skills base across the UK, and our location and language. The UK is well poised to continue to attract investment, not only from the US but also from Europe and high growth economies.”
Olly Laughton-Scott, Managing Partner of IMAS, said:
“The UK is a key hub in the increasingly globalised financial services marketplace and we expect to see continued cross-border M&A activity with international firms looking to enter or expand their presence in the UK market. It is a testament to the UK’s transparency and disclosure requirements in both the public and private capital markets that key statistics, such as ownership and financial size, are available enabling the production of this report.”
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