Lloyd’s of London aims to have a new Brussels office up and running by the start of 2019, providing a subsidiary within the EU so that its insurance underwriting business carries on “without interruption” after Brexit.
The world’s biggest insurance market confirmed on Thursday it would set up a new subsidiary in the Belgian capital, which will be able to underwrite insurance policies from all 27 EU and three EEA states after the UK has left the union.
Inga Beale, the Lloyd’s chief executive, said: “It is important that we are able to provide the market and customers with an effective solution that means business can carry on without interruption when the UK leaves the EU.
“Brussels met the critical elements of providing a robust regulatory framework in a central European location, and will enable Lloyd’s to continue to provide specialist underwriting expertise to our customers. I am excited about the opportunities this venture will offer the market by providing that important European access efficiently.”
Chairman John Nelson said the subsidiary would have its own board and employ “tens” of people, a mixture of existing staff that will move from London and new hires. It will be modelled on Lloyd’s other overseas hubs, such as China. He said it was too early to say if other insurers would follow suit.
Lloyd’s employs about 600 people in London out of global workforce of 1,097. The move came a day after Theresa May triggered article 50 to kickstart the process of leaving the EU.
Beale told BBC Radio 4’s Today programme: “We looked at many jurisdictions you can imagine, we were very objective. What we were after was some jurisdiction that had a really robust quality reputation for regulation. We also wanted to be able to access talent and we wanted a really good accessibility not only from other parts of continental Europe but also from London.”
Special tax deals did not play a role, she said. “Tax is not one of the considerations for us. It wasn’t one of the key factors.”
The US insurance giant AIG announced this month that it would set up an EU subsidiary in Luxembourg, where it already has a branch, to serve EU clients after Brexit. Goldman Sachs is to move move hundreds of bankers to Frankfurt and Paris, while HSBC wants to switch 1,000 investment banking jobs from London to the French capital.
Beale stressed that it was crucial for both the UK and the EU to “negotiate an agreement that allows business to continue to flow under the best possible conditions once the UK formally leaves the EU”.
She added: “I believe it is important not just for the City but also for Europe that we reach a mutually beneficial agreement.”
Lloyd’s reported a £2.1bn pre-tax profit for 2016, the same as in 2015. It had £2.1bn of major claims, the fifth highest since the turn of the century, mainly due to Hurricane Matthew and the Fort McMurray wildfire in Canada.
A lower underwriting result was offset by “significantly” improved investment returns, driven by a downward yield shift in bond markets, and foreign exchange gains, mainly caused by the pound’s slide since the Brexit vote.
This article was written by Julia Kollewe, for theguardian.com on Thursday 30th March 2017 08.04 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010