ALASTAIR ROSS
The search in Scotland for new businesses and industries to drive up our economic growth is never-ending, but it’s important we don’t overlook the success of the indigenous multi-billion pound insurance industry where Glasgow has emerged as a top UK hub.
Edinburgh is synonymous with life assurance and pensions, but Glasgow is steeped in centuries of commercial insurance which has underpinned trade across Scotland and the rest of the world.
The Association of British Insurers commissioned economic consultancy Volterra which used data from the Office of National Statistics and other public sources to measure the scale and value of insurance in Glasgow and other UK cities today.
This found that the industry – including insurance, reinsurance, brokers and associated businesses – supports 10,500 jobs in the Glasgow City Region and contributes more than £1bn per annum in Gross Value Added to the economy.
Putting that in context, a Fraser of Allander Institute study last year found the BAE upper Clyde shipyards supported a total of 5943 jobs. Glasgow produces more satellites than any other European city, but the space industry’s national contribution is 7,000 jobs and £130m per annum. Insurance in Glasgow overshadows both.
Volterra also found that productivity amongst insurance workers is worth more than £135,000 a year – almost double the UK average across all industries – because we employ highly-skilled people and create high-value products.
Only central London has a high concentration of insurance jobs per head than Glasgow’s International Financial Services District. The city offers insurers a skilled and flexible labour market, quality and competitive infrastructure in terms of office accommodation, digital or transport links. These are all factors in Glasgow winning investment and jobs from insurers in other UK cities as operations are relocated here.
Major infrastructure projects like the Forth Replacement Crossing simply cannot be built without insurance – and that insurance is being written out of Glasgow.
First Minister Nicola Sturgeon and her Financial Services Advisory Board endorse and support the general insurance sector’s work on flooding and property protection in order to help improve Scotland’s resilience. Earlier this month I presented our research to the Glasgow Economic Leadership which welcomed its findings on the city’s insurance strengths.
But talking about these achievements is only part of the story. We need to write the next chapters by making sure Glasgow keeps offering the best environment for insurance to thrive.
Insurance in Glasgow faces challenges like any other sector: the disruptive rise of technology testing traditional business models, competition for skilled labour from schools, further and higher education, and of course the changes required by Brexit.
We need to attract talented young people into insurance and show how our range of career paths compete with other industries and sectors like digital. Who would have expected Charles Reeves, who developed the Call of Duty video game series, to end up working on pensions with Aviva?
The question we all need to answer is how do we retain and build on this in the next five years to keep Glasgow ahead.
Alastair Ross is assistant director, head of public policy (Scotland, Wales and Northern Ireland), for the Association of British Insurers.
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