Top boss at the massive marketplace has revealed that operations may leave the country.
The UK insurance market may not remain the most important one in the world due to the Brexit vote. Chairman of Lloyd’s of London, John Nelson, cautioned that the marketplace may be required to move some of its business over to continental Europe. That could mean a loss of a large chunk of the staff currently located in the United Kingdom.
In fact, Lloyd’s insurance operations may be on their way out of the country even before Brexit negotiations are complete.
Nelson stated that unless the British government can provide “clarity” bout the country’s future relationship with the European Union, much of the UK insurance market may be leaving. He stated that it was “critical” for this industry to keep up its “passporting” rights. These are what make it possible for the insurance marketplace to operate within the EU countries. The Brexit negotiations risk placing London foreign investments at risk.
The UK insurance market risks a “massive disruption” should it lose its passporting rights.
Lloyd’s isn’t the only one concerned over London’s ability to keep up its passporting rights. Nelson said that if access to the single market is lost, it could lead to a “massive disruption.” This would force the marketplace to have to alter their operations, he said.
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He explained that if Lloyd’s cannot access the EU single market, the business will need to be written both by the company and by others located within the European Union. “The loser will not be Lloyd’s or the industry; sadly, it will be the UK,” said Nelson. He pointed out that the insurance business is a mobile one and that if uncertainty remains for a long time, the industry will change locations seeking greater stability.
Nelson stated that “clarity is important, and clarity fairly soon.” He cautioned that if they don’t see a clear path shortly, they will need to put a contingency plan into action. That could involve taking their business out of London more rapidly than the timetable for the Brexit negotiation.
He underscored the fact that Lloyd’s is not “Lloyd’s of London,” in that they are not exclusively located in the UK insurance market. They have operations worldwide. To maintain their passporting rights, they may need to shift their current British business elsewhere.