The world’s largest and oldest insurance market, Lloyd’s of London has announced that it will be opening a post-Brexit Brussels subsidiary to ensure that it stays “at the heart of the EU”. Their headquarters will, however, remain in London.
The move will allow them to write risks from all 27 European Union and three European Economic Area states after the United Kingdom has left the EU, providing their customers and partners continued access to the Lloyd’s market.
“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,” said Lloyd’s Chief Executive Inga Beale.
“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.”
Whilst the UK Government has triggered Article 50, it remains a full member of the EU for at least two more years. Lloyd’s have reassured clients that there is no immediate impact on existing policies, renewals or new policies, including multi-year policies, written during this period of time.
“It is now crucial that the UK Government and the European Union proceed 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. We stand ready to help and support the Government as best we can,” said Beale.
Lloyd’s is expected to shift up to 100 jobs initially to Brussels from London, where it currently employs about 600 people. Globally it has a workforce of 900. It will fine tune the details of the move with regulators over the coming months, to ensure that the new centre is up and running by the time the UK leaves the EU in two years.
The announcement comes with the news that Lloyd’s enjoyed a £2.1 billion pre-tax profit for 2016, a far more agreeable sum than in a disastrous 2011 when the market paid out a record £20.6 billion.
While many big financial names have been looking to open offices on the continent, Lloyd’s is the first major financial firm to choose Brussels as their EU base. Frankfurt appears to be the preferred destination for many investment banks including Goldman Sachs, which has said it will move hundreds of bankers to the German financial centre as well as Paris.
The US insurance giant AIG has recently revealed plans to set up their EU subsidiary in Luxembourg to best serve clients after Brexit, and JP Morgan is yet to decide on a location.