(Bloomberg) — Nigel Wilson, the chief executive of Legal & General Group Plc, has said it is easier to invest in the US than the UK and that it has taken too long to liberalize insurance capital rules to unlock funds to support economic growth.
Wilson, who has advocated for investment in infrastructure across the UK for years and made L&G one of the UK’s biggest backers of such projects, said restrictive regulations were holding back funds from going into sectors such as renewable energy and making homes more energy-efficient.
“There is an urgent need for an investment-led recovery,” Wilson said in an interview with Bloomberg News. But “it’s easier to invest in America than it is in the UK.” He was speaking as L&G posted a first-half profit after tax of £1.2 billion ($1.5 billion), compared to £1.1 billion a year ago.
Wilson’s comments come amid the contest for who will be the next Prime Minister and as the UK is grappling with soaring inflation, rising interest rates and a cost-of-living crisis.
Foreign Secretary Liz Truss and former Chancellor of the Exchequer Rishi Sunak, who are battling to replace Boris Johnson, have identified firms like L&G as key to government plans to boost the UK economy through large-scale infrastructure spending.
Truss and Sunak have both said they will overhaul Solvency II capital requirements, which would unlock as much as £95 billion ($116 billion) in capital to invest in the UK, the Association of British Insurers said last year.
Solvency II, a legacy of the UK’s European Union membership, has been criticized by insurers who say it requires them to hold too much capital and restricts investment in certain assets.
The Conservative candidates’ willingness to unwind some of the Solvency II rules was welcomed by Wilson, who criticized the time lawmakers have taken to enact reform. “It was the easiest of Brexit dividends and it has taken us six years and we still haven’t achieved it,” he said.
Insurers and asset managers can play a key role in helping the UK bounce back from its economic difficulties, Wilson said. “We’ve got to speed up the planning process. We need to level up in London as well as the rest of the UK.”
L&G has invested billions of pounds across the UK in assets ranging from affordable housing to large-scale urban regeneration projects. Earlier this month, the firm announced it had committed £160 million of funding to help develop an area of Sheffield City Centre.
L&G is planning to help its own lowest-paid employees as energies bills are set to surge over the coming months. “We are conscious lots of people will be struggling and will be struggling going forward,” Wilson said. L&G has a “whole batch of initiatives,” that it will announce later this month to help with the cost-of-living crisis.