Don’t be surprised if other insurance companies follow Lloyd’s to Brussels, where the industry giant is planning to establish a new EU base to keep its access to the single market.
Lloyd’s officially announced on Thursday that it was setting up a new European insurance firm to be located in the Belgian capital, which will write risks from all 27 EU and three EEA states after Brexit.
“I’d expect a little ecosystem to gradually develop there. I think some [companies] could follow us,” Nelson told the Financial Times.
“Brussels has an extremely good regulatory reputation… they displayed a key understanding of the Lloyd’s market, and of the flexibility they needed,” he added.
It is also important that Brussels is located at the heart of Europe and that it has good transport connections, according to Nelson.
“The other important thing was talent. We needed a good talent pool to recruit from and Brussels has that,” he went on saying.
Some observers, like Sarj Panesar, global head of business development for insurance at Societe Generale Securities Services, agreed with Nelson. He told Reuters: “The next question is how many of the other UK-domiciled insurers and reinsurers will follow.”
“We can expect some to join Lloyd’s in Brussels.”
Indeed, the industry watched intently yesterday as Lloyd’s revealed its Brussels move, which could affect the plans of other companies. One insurance CEO previously told Reuters: “As other larger insurers announce their decisions on this matter, it helps inform our choice – we are happy to benefit from their analysis.”
The new Lloyd’s subsidiary will cost “a few tens of millions” to set up, Nelson said, and will initially be staffed by “tens of people,” lower than the 100 employees reported to be relocating from the London headquarters.
According to the Lloyd’s chairman, the new EU outpost will have its own directors and senior management. More people could be added to the staff if it develops a market in the future.
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