on May 22, 2013 by admin in Insurance Industry, Comments (0)

Government plans policy sweeteners for insurance industry

LONDON | Tue May 21, 2013 5:12pm BST

LONDON (Reuters) - Britain plans to boost the insurance industry with policy sweeteners such as tax breaks, hoping to nurture it as a source of investment and an engine of economic growth.

Treasury minister Greg Clark said the government would extend to the insurance industry a series of measures announced earlier this year to boost asset managers.

"The government recognises that the insurance industry is a key asset for this country and is determined to maintain and sharpen the sector's competitive edge," Clark told a conference run by specialist publisher Insurance Day.

In his budget speech in March, chancellor George Osborne had unveiled plans to scrap a tax on UK-domiciled funds and a levy on trades in small company shares in order to lure mutual fund assets from rival financial centres such as Dublin and Luxembourg.

Clark on Tuesday said the government will be "embarking on similar work for the insurance sector."

He noted that the global financial crisis had made banking a higher priority among policymakers than insurance, despite the fact that London is a key international hub for the industry and home to the Lloyds of London market.

According to the Association of British Insurers, the industry contributes 10.4 billion pounds in taxes to the UK, employs 290,000 people and manages investments worth more than a quarter of the British economy.

As banking has floundered since the 2008-2009 crisis, the insurance sector has thrived with Aon Corp, the world's biggest insurance broker, recently opting to relocate its headquarters to London from Chicago.

The government is also eyeing large insurers and pension fund managers as a key source of finance for its plans to overhaul Britain's crumbling infrastructure at a time when Treasury coffers are short of funds.

(Editing by David Holmes)

Article source: http://uk.reuters.com/article/2013/05/21/uk-britain-insurance-idUKBRE94K0U720130521

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