In what could be seen as a significant sign of things to come for the insurance industry, Lloyd’s of London has outlined its post-Brexit plans – and that will include the establishment of a base in the European Union.
The 328-year-old market will move part of its operations to the EU with a shortlist of five destinations reportedly already drawn up – with a proposal expected to be presented to members in February. Market clearance will then be sought, with the new location allowing it to trade across the bloc and get around the passporting system.
The news was revealed as part of a
Financial Times report this morning, with John Nelson, the chairman of Lloyd’s, outlining that the market needed to act now and not wait – especially as 11% of its existing revenues come from Europe.
“Insurance is a mobile business,” he was quoted as saying in the report. “In common with other financial institutions, we need to put our plans in place — at least on a precautionary basis.”
According to the publication, it is still Lloyd’s preferred option to maintain its base in London – and plans could be shelved if there was a “no change” deal struck between the EU and London that allowed businesses to trade freely through the EU.
Establishing a new base would potentially cost tens of millions and ramp up the market’s operating costs, especially in terms of regulation and compliance. It would also mean that Lloyd’s would have to capitalise the venture separately.
The move comes as MPs attempt to step up pressure on the government to seek transitional arrangements.
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