Thursday 30 March 2017

Lloyd's Of London Plans To Open Brussels Office IN 2019

Lloyd's Of London

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 its insurance underwriting business carries on “without interruption” after Brexit.

The world’s biggest insurance market confirmed on Thursday it would set up a subsidiary in the Belgian capital, which would be able to underwrite insurance policies from all 27 EU and three EEA states after the UK 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.”

Beale told BBC News the move was the group’s plan B. “We want to make sure everything’s up and running and it takes a while to set up a company. It will be up and running by the middle of next year, but if something else gets negotiated we can pull back.”

She said though the UK was expected to leave the EU in two years, there would be “years and years of negotiations”.

Chair John Nelson said the subsidiary would have its own board and employ “tens” of people, a mixture of existing staff who would move from London and new hires. It would 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.”

AIG, the US insurance company, announced this month that it would set up an EU subsidiary in Luxembourg, where it 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 it was crucial for 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.

“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.



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