The governing board of Lloyd’s of London, the world’s largest insurance market established in 1688, will this Wednesday approve the establishment of a new base in Europe just as UK prime minister Theresa May triggers the Brexit process.
According to reports, the council of Lloyd’s will gather on March 29 to decide whether to set up an operation in Belgium or Luxembourg in order to protect revenues generated within the European Union (EU). The decision is expected to be announced shortly after the meeting.
“Lloyd’s remains committed to its European markets following the ‘Brexit’ vote and is delivering on plans to continue trading with the single market,” the insurance market’s website confirms.
“We have decided to focus our efforts on creating a subsidiary or company model within the EU as we believe this option will offer our customers in the UK and outside the access they expect to the EU and the Lloyd’s market.
“We will continue developing this option in consultation with the market and will come back with further details later in the quarter.
“Our position remains that it would be in Lloyd’s best interest and that of the City as a whole, if we continued to have the ability to access the single market freely. We will continue to work alongside the industry and with the government in any way we can to facilitate this. The flow of business from London to Europe and vice-versa is a critical element of what makes London the heart of the world’s financial sector.
“Lloyd’s will remain headquartered in London.”
Lloyd’s has considered several locations for its new EU base, including Frankfurt and Malta, but is believed to have narrowed its search since last month. Luxembourg has previously been reported as its favoured EU location. US insurer AIG has also chosen the small European country, also known as the Grand Duchy of Luxembourg, as its future European hub.
The insurance market’s outgoing chairman, John Nelson said there had been “a lot of enthusiasm” from several EU countries, but Lloyd’s would choose a location with reputable regulation.
“If you look at the way we operate in different parts of the world – in Singapore, in China – nobody would say that we’ve gone there with our hubs because it’s a light touch, light regulation regime. Quite the opposite,” Nelson said earlier this month.
“So anywhere we go, we want really good quality, firm regulation. We don’t want to go to a sort of Banana Republic type country, but there aren’t many of those, fortunately, in Europe.”
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