Insurance is still an industry that is actually CREATING jobs in the UK

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Every other week, there's a rumour about a bank threatening to pull its headquarters out of London, but the UK's reputation as an insurance hub remains as strong as ever.

The decision of insurance broker Aon to base its corporate HQ in London may not create a huge number of jobs initially, but its significance should not be underestimated.

"I think Aon's move is a very significant statement for the attractiveness of London and that it's a trend that more organisations are looking to move their head offices here," says Howard Scott, insurance partner at PwC. "Initially, the number of jobs created within an individual organisation may not necessary be sizable, but over time it will increase."

Aon is redomiciling its HQ from the US to London for a combination of reasons; a more favourable tax environment (which will free up money for its expansion plans), to be closer to the Lloyds market and to gain better access to emerging markets.

Just 20 or so jobs will be created in London, but this is not the point. London may be fending off competition as the world's leading international banking hub, but more insurance companies are seeing the UK as an attractive destination.

One of the (many) reasons the insurance industry is still viewing London as an attractive destination is a concentrated, available and skilled workforce, suggests Jerry Theodorou, vice president of insurance research and consulting firm Conning.

"It provides access to markets on both the demand and the supply side. When companies need coverage, primary or reinsurance, business flows to London," he says.

Insurance broking and actuary positions are well-paid, but generally the industry never reaches the high salaries in investment banking. However, at the senior end it can be very lucrative.

Gregory Case, chief executive of Aon, pulled in a total package of $18.5m last year, and his relocation expenses to the UK – including a $135k "foreign service allowance" and $336k "annual housing allowance" – totals $641k. Steve McGill, chief of Aon Risk Solutions, will receive $393k for relocating.

In recent years the likes of Hiscox, Amlin and Catlin have redomiciled their HQ to London, and Aviva moved its European head office back to London from Dublin late last year. However, others have departed or moved to Ireland, where corporation tax is just 12.5%. Willis Group redomiciled to Dublin in from Bermuda in 2009.

Generally, specialist recruiters in the insurance sector remain skeptical of any headquarter moves when it comes to job creation, however.

"There's something of a merry-go-round of redomicilation among non-life insurance firms, and most firms just do it for tax reasons and place a brass plate above the new HQ," says Paul Walsh, chief executive of Acumen Resources. "Initially, firms tend to require compliance officers, accountants and support staff. It's only after a number of years that they tend to commit to any sort of expansion."

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