Lloyd’s making post-Brexit plans
Firm says it is ‘advancing’ its plans amid ‘passporting’ doubts’
Published in the Sunday Business Post By Andrew Fanning Sep 22, 2016
Insurance market Lloyd’s of London has said it is “advancing” its plans for how it will continue trading with EU countries when Britain’s membership of the EU ends.
“Continental Europe will continue to be an important market for Lloyd’s, as it accounts for 11% of gross written premium and we fully expect to maintain our position in the new post-Brexit landscape,” Lloyd’s said today in a statement accompanying its first-half results. They showed a 22 per cent jump in pre-tax profits to £1.46 billion.
Lloyd’s said the Brexit referendum result had no immediate impact on the country’s ability to continue trading with the EU. It continues to trade under the current passporting regime.
Chief executive Inga Beale told the BBC Lloyd’s may set up a subsidiary or branches elsewhere in Europe if Britain leaves the EU. She said it had not yet been decided whether to set up branches in individual EU countries or an EU-wide subsidiary, but the latter would be cheaper.
Passporting rules allow a bank or financial institution incorporated in any EU member state to sell its products and services throughout the integrated economy.
There are questions, however, about whether this access can be maintained in a final Brexit arrangement. Last month, a close ally of German Chancellor Angela Merkel has said the European Union will not bend its rules to preserve the City of London’s access to the EU market once Britain leaves the union. Negotiating any new arrangement promises to be “very difficult”, German MP Michael Fuchs told Bloomberg.
There has been speculation that Ireland could benefit from new finance jobs and investment from British firms such as Lloyd’s if passporting cannot be retained.
Last month, consulting group PwC’s ‘financial attractiveness index’ showed that Dublin currently ranks second behind London as the most attractive of European financial services centres. Luxembourg, Paris and Vienna rank third, fourth and fifth respectively.
But its analysis concluded that the loss of passporting in Britain after Brexit could see London lose its place as the EU’s strongest financial centre with Dublin rising to the top spot in the league.