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ABI survey pushes UK govt on tax

Eighty-one percent of UK insurance executives think that if the UK government fails to improve tax competitiveness there will be a drop in the number of insurance firms based in Britain.

This was the finding after trade body the Association of British Insurers (ABI) surveyed 75 UK insurance industry leaders.

The study also found that 71 percent of the chief executives and finance directors of leading insurers questioned felt that the UK's current rate of corporation tax was uncompetitive.

The ABI also said there was a chance to capitalise on the potential threat to reinsurers in locations such as Bermuda posed by a change in global attitudes towards tax havens, especially from North America.

The ABI said the UK, which currently hosts only 10 percent of total global reinsurance capital, had a specific chance to attract a much larger share of the wholesale and reinsurance market.

The association's many proposals included introducing a corporate tax exemption for those with branches abroad - in order to encourage companies to keep or set up their headquarters in the UK - and a reduction in corporation tax when fiscal conditions allow it.

The ABI said that in 2007 insurers contributed nearly £10bn in tax revenues to the UK, paying the third-highest corporation tax of any sector.

The survey results come as The Insurance Insider launches its own Global Tax Survey. The study is seeking to gauge the potential for major UK players in global specialty (re)insurance to redomesticate if the UK government improves its competitiveness from a tax and regulatory standpoint.

The survey, whose results will be published in the late autumn, is seeking to quantify the potential prize to the UK exchequer in terms of potential overall increased tax revenues, as well the additional jobs created for the London (re)insurance market if relative UK international competitiveness is achieved.

For further information on how to complete the survey, which is being conducted in complete confidence, please send an email to Amber Bates of The Insurance Insider on amber@insuranceinsider.com

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