There is a growing unease in certain corners of the insurance market - a sense that the global balance of power may be shifting. For decades, London has occupied an indisputable position at the heart of international insurance. Yet as the United States accelerates its adoption of artificial intelligence, invests heavily in digital infrastructure, and outpaces its peers in productivity growth, the question becomes harder to avoid: could the US be positioning itself as the next dominant insurance hub?
The concern is amplified by the widening gulf in productivity between the UK and the US.
Productivity, often described as the foundation upon which long-term prosperity rests, has become a point of acute divergence. According to the House of Commons Library’s latest analysis, UK labour productivity in the second quarter of 2025 was 0.8% lower than a year earlier. Growth has been sluggish for more than a decade and now sits significantly below its long-term trend.
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International comparisons are starker still. In 2023, the UK ranked fourth in the G7 on GDP per hour worked — a respectable position on paper - yet its productivity level was roughly 20% lower than that of the United States. The accompanying chart in the Commons briefing illustrates the gap plainly: American workers generate around 97 US dollars of GDP per hour, compared with 78 dollars in the UK.
For an insurance market that competes on speed, expertise and, increasingly, computational precision, such disparity is not a trivial matter. It shapes the pace at which firms can modernise, the cost base upon which they operate, and the degree to which they can exploit emerging technologies, particularly AI.
The United States, by contrast, appears to be hitting its stride. American productivity has risen more rapidly than that of most advanced economies for years, and recent gains have been reinforced by substantial investment in technology. In sectors that underpin modern insurance - data science, advanced analytics, software engineering and digital services - the US has achieved what the Fraser Institute describes as a “productivity payback”, the moment where sustained technological investment begins to deliver exponential returns.
This payback is now being felt throughout the American insurance industry. Carriers are rebuilding core systems around automation, brokers are deploying AI-driven placement tools, and underwriting models are being recalibrated with real-time data. At the same time, the US enjoys deeper capital markets, abundant venture investment and a labour force that, on average, is more productive per hour. The foundations are aligned for the United States to scale its technological lead - and in insurance, scale matters.
The UK, by comparison, is constrained by slower productivity growth and uneven technology adoption. The House of Commons report confirms that the UK’s post-2008 productivity stagnation has not meaningfully reversed.
Despite pockets of innovation - the ongoing digitisation of the Lloyd’s market being one - the broader economy, including financial and professional services, contends with legacy systems, fragmented data architectures and organisational processes that remain labour-intensive.
For brokers, these structural weaknesses manifest in familiar ways: slower underwriting cycles, limited use of AI-enhanced pricing tools, and a patchwork of systems that makes true integration difficult. The cost of modernisation rises each year productivity fails to keep pace.
There is also the matter of talent. The US continues to attract a disproportionate share of data scientists, AI specialists and digital architects - precisely the professionals now reshaping the future of underwriting and distribution. A market with higher productivity, faster adoption of technology and more competitive compensation creates a gravitational pull that Britain may find increasingly difficult to counter.
None of this diminishes London’s enduring strengths. Its concentration of specialist expertise, its reputation for handling complex global risk, and its unrivalled marketplace ecosystem remain formidable advantages. Yet insurance is entering an era in which computational capability may matter as much as human judgement, and investment in the tools that support such capability is now a global competitive differentiator.
The UK’s lag in productivity is therefore not merely a statistical concern; it is a strategic risk. It influences wage capacity, capital investment, technological readiness and market attractiveness - all critical variables as the industry transitions into an AI-defined decade.
Could the United States become the world’s insurance capital? The answer is not predetermined. London’s heritage, technical depth and global reach endure. But the future of underwriting excellence appears increasingly tied to the economies capable of deploying AI at scale - those with the productivity, investment capacity and digital foundations to support it.
On that measure, the United States has taken an early and decisive lead. The challenge for the UK is no longer simply to protect its position, but to match the pace of a rival whose productivity advantage threatens to become structural. For British brokers, this is the question that will shape the industry’s next chapter: can the UK close the gap before the United States’ technological momentum becomes too great to overtake?
