Lloyds may be forced to move business to continental Europe

Posted By: September 06, 2016

Irish News (Belfast). Tuesday, September 6, 2015

INSURANCE market Lloyd’s may be forced to move some of its business to continental Europe as a result of the vote to leave the EU, chairman John Nelson has warned.

And he said operations may start leaving London before Brexit negotiations are concluded unless the government can provide “clarity” about the UK’s future relationship with the EU.

Mr. Nelson said it was “critical” for the financial services industry to maintain the “passporting” rights, which allow it to operate within EU countries, and warned that Brexit may put foreign investment in the City of London at risk.

Overseas investors share London’s interest in maintaining passporting rights and access to the single market, fearing “massive disruption” if they are forced to change their operations, he said.

But he told the BBC Radio 4 Today programme: “The issue is that if we do not get access to the EU single market, what will happen is that business will be written by us and others onshore EU. The loser will not be Lloyd’s or the industry; sadly, it will be London.

“There will be bits of business where it will be better for us and more efficient for us if we don’t get single market access, if we write it in the EU.

“Insurance business is quite mobile. If there is uncertainty for a prolonged period of time, then the industry will vote with its feet and we will be in that.

“If we do not see a clear direction of travel, we will have to invoke our contingency plans and that would mean business leaving London more quickly than the renegotiation timetable.

“Therefore, clarity is important, and clarity fairly soon.”

Mr. Nelson, who is setting out his concerns in a speech in the City on Monday evening, said: “Lloyd’s is Lloyd’s, it is not Lloyd’s of London. We operate right around the world. We have our biggest hub outside London in Singapore, we have big hubs in Beijing and Shanghai, and we have a hub in Dubai and big businesses in Latin America.”

Meanwhile, the chief executive of Hermes Investment Management, Saker Nusseibeh, said that in order to maintain passporting rights, London will have to be prepared to obey Brussels regulations without the UK having an input into deciding them. He warned that business may move out of the City to continental Europe if Brussels is unwilling to accept this arrangement.