Lloyd’s of London will open a new Brussels subsidiary in early 2019, the historic insurance market said Thursday in the first fallout from Britain’s decision to trigger Brexit.
The group, which has insured against earthquakes, shipwrecks and revolutions, is now in the eye of the Brexit storm and seeking to ensure access across the European Union once Britain leaves the bloc.
Lloyd’s announced the news one day after British Prime Minister Theresa May activated the two-year countdown to the nation’s EU divorce.
“Lloyd’s, the specialist insurance and reinsurance market, has announced it will be setting up a new European insurance company to be located in Brussels,” it said in a statement that gave no indication of potential job losses in London.
“The intention is for the company to be ready to write business for the 1st January 2019 renewal season, subject to regulatory approval.”
Lloyd’s had repeatedly warned before last year’s shock referendum that it could move operations to elsewhere within the EU in the event of Brexit.
Central European location
The group added Thursday that its new Brussels subsidiary would allow it to underwrite insurance risks across the 27 EU nations that will remain.
“The company will be able to write risks from all 27 European Union and three European Economic Area states after the United Kingdom has left the EU, providing our customers and partners continued access to the innovative solutions of the Lloyd’s market,” it said.
Lloyd’s chief executive Inga Beale said Brussels met its “critical” requirements of a “robust regulatory framework in a central European location”.
She added: “I am excited about the opportunities this venture will offer the market by providing that important European access efficiently.”
Media reports suggest that about 100 jobs could be shifted from London, though that number may rise as the firm establishes itself in the Belgian capital.
According to media, Brussels beat Dublin, Luxembourg and Malta in the selection process.
Nine months after the shock referendum vote, Prime Minister May on Wednesday formally activated Article 50 of the Lisbon Treaty, meaning Britain is set to leave the bloc in 2019.
Lloyd’s stressed Thursday that, for at least two more years, there will be no immediate impact on its existing insurance policies, renewals or new policies.
‘Crucial’ for trade agreement
“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,” added Beale in Thursday’s statement.
“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.”
Britons voted on June 23 in favour of quitting the bloc despite warnings from the business community over the potential adverse impact of Brexit.
Lloyd’s currently enjoys “passporting” rights – which allows EU member states to trade across national borders, providing a gateway to access the rest of the bloc. It also benefits from trade agreements.