The Association of British Insurers (ABI) says the industry’s £10.4 billion ($16.2 billion) tax bill highlights the need for more competitive and consistent rules to aid industry growth.

Its third biannual report on insurance tax shows the industry contributions could fund the UK Government’s Home Office budget or the combined budgets of the departments of transport, communities and the Foreign Office.

The report also says corporation taxes have grown significantly since 2009, costing more than £2.7 billion ($4.2 billion) a year, making the insurance industry the third-highest contributor in this area.

ABI Director-General Otto Thoresen says these figures highlight the need for the UK Government to maintain consistent and competitive tax rules which allow the industry to further grow so that it can “make an important contribution to the UK coffers”.

The ABI is now in discussions with the Government on how it could be using the tax system as an asset to attract and retain UK insurers.

“It’s important we encourage our good, successful UK businesses to expand and grow rather than having rules which make the UK a less attractive place to base a business,” Mr Thoresen says.

“Insurers are crucial to the economy, and our total tax contribution is now higher than it was before the recession. That shows the important role the insurance industry is playing in the recovery and how resilient the industry is during tough times.”