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City minister John Glen pledged it would turn the UK into the world’s most dynamic financial services sector, a vision previously outlined by Chancellor Rishi Sunak. Sir Nigel Wilson, chief executive of Legal & General, and Andy Briggs, chief executive of Phoenix Group, responded with a vow to pump some £80billion into the economy.

Since 2016, the insurance sector has been subject to “Solvency 2 rules”.

These were aimed at harmonising insurance regulation across the EU.

But Mr Glen, speaking at the Association of British Insurers Annual Dinner on Monday, said the unwieldy, EU-centric rulebook was being radically reformed.

He added: “Leaving the EU means the UK can now tailor the prudential regulation of insurers to our unique circumstances.

“Regulation developed to reconcile insurance markets for 28 countries in the European Union never worked well for us. Now we’re outside the EU, this Government is determined to fix that.

“We have a genuine opportunity to maintain and grow an innovative and vibrant ­sector while protecting policyholders and ensuring the safety and soundness of firms.”

Mr Glen added that it would make it ­“easier for insurance firms to use long-term capital to unlock growth, something the Prime Minister and Chancellor have rightly been outspoken about”.

The minister predicted there would be a capital release of as much as 10 to 15 per cent from life insurers, “allowing them to put tens of billions of pounds into long-term ­productive assets, with multiple benefits country-wide”.

Sir Nigel said reform will allow L&G to invest in excess of £30billion in “levelling up” projects including renewable energy and social and affordable housing.

Mr Briggs added: “Phoenix could invest up to £50billion in illiquid and sustainable investment.”

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