London is at risk of losing its global share and importance in reinsurance to places like Bermuda, a new report has warned.

“London Matters — The Competitive Position of the London Insurance Market”, commissioned by the London Market Group, said that the City of London’s share or reinsurance had dropped from 13.4 per cent in 2013 to 12.3 per cent in 2015.

The report blamed centralised reinsurance purchasing and a weaker presence in emerging markets, which are gaining in importance.

And it said: “Regulatory regimes have supported the growth of alternative capital such as in Bermuda.

“The London Market is by nature not set up to compete for large structured reinsurance deals and is not well placed to compete with global operators for growing markets in mortality/longevity risk.

“Competitive market has intensified the advantage of carriers with the lowest cost of capital and expenses, putting London reinsurers at a disadvantage.”

Bradley Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers, said: “It’s a fascinating report.

“Bermuda is a leader in property-catastrophe reinsurance, energy, excess liability and alternative capital feeds into those and other lines of business.

“Bermuda’s commercial insurers and reinsurers have accepted the role of alternative capital and tried to play it to their advantage as well.

“We’ve got a vibrant, innovative, disruptive market here in Bermuda. And our actions make global insurance markets more competitive. That is the economic value we bring to the world’s major insurance markets.

“We’ve been building it out since the captive business formed here in the late 1960s.

“It didn’t happen with a government industrial planning policy, it happened with good people, with innovative ideas about putting capital to work to take on insurance risk, who found a government and regulator willing to listen and act.”

Mr Kading added that the “biggest surprise” in the report was the growth of Zurich in Switzerland as an industry hub.

He said: “London is the leading commercial insurance and specialty insurance centre. The report reaffirms that.”

But he said that it had to be seen if the London market would be helped or hindered by the UK’s decision to leave the European Union.

Several major financial institutions have already announced that they are set to move staff out of Britain before Brexit takes effect in two years’ time.

Lloyd’s and AIG are among those looking to move staff to other parts of the EU so they can continue doing business without restrictions with the remaining 27 EU countries.

Mr Kading said: “The interesting question is whether Brexit hurts or helps that.

“Insurers in the UK now have to do a straddle and have business operations in both London and the continent.”

Mr Kading added: “Bermuda has its many challenges. It’s refreshing that the London Market Group commissioned several reports that are so candid with comparative data and focused on the challenges they face.”

The report, however, said that London’s position in insurance was “broadly unchanged” in 2015, with a 7 per cent share of the global commercial insurance and reinsurance markets.

It added that the weakness in reinsurance and emerging markets was cancelled out by gains in specialist areas like marine, energy and aviation.

But the report warned that all three of those markets were shrinking, although London’s sales were falling more slowly than the market as a whole.