ABI calls for better working conditions to avoid mass exodus
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The Association of British Insurers is calling for a more competitive and business friendly environment to keep businesses in the UK.
The trade body says more insurers are expected to move their business overseas unless conditions improve.
A study by PricewaterhouseCoopers, for the ABI, found insurers paid only 8.4 per cent less corporation tax in 2008/09 than the previous tax year, compared to a 39 per cent fall for the financial services sector as a whole in the same period.
The study also found that insurers contributed to £8.2bn in taxes in 2008, £3.2bn in combined business taxes in 2008 and £5bn for the Government. The ABI says insurance firms still pay the fourth highest corporation tax of any sector.
UK insurers who have moved offshore recently include Hiscox, Omega Insurance Holdings, Kiln and Hardy Underwriting Bermuda, who all moved business to Bermuda between 2006/2007.
Beazley moved to Ireland in February 2009, followed by Brit Insurance Holdings to Netherlands in December last year.
ABI director of financial regulation and taxation Peter Vipond says: “The real danger for UK plc is insurers deciding to locate away from the UK. This is not just about who offers the lowest tax rate, though that remains an important factor.
“Financial centres, such as the Netherlands, Ireland and Hong Kong, have emphasised their friendly attitude to business. Just as importantly they offer stability in their tax systems over the medium term. The UK cannot afford to stand still as other financial centres become more attractive.”
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