Lloyd’s of London is to establish a subsidiary in Brussels to enable it to maintain a presence in the Europe Union once Britain has left the bloc.The decision by the world’s largest speciality insurance market will result in about 100 staff relocating from London, which will remain its global headquarters, to Belgium. The company said it had chosen Brussels because of its regulatory framework and access to talent.Following announcement of the decision on Thursday, there was speculation that other financial services firms could eye Brussels as a post-Brexit base, not only because Lloyd’s has long been a magnet for insurance underwriters, but because of relatively low rents and its closeness to London.Lloyd’s, which employs 700 people in London, had initially eyed Dublin as a base for its subsidiary but, eventually, narrowed the choice to Luxembourg or Brussels, before opting for the latter at a board meeting on Tuesday.

Another blow for Dublin

The decision came as the latest blow to Dublin following recent decisions by Japanese banks to set up offices in continental Europe, after initially appearing to favour Ireland.Dublin has now complained to the European Commission that it is being undercut by rival European centres, such as Frankfurt, Amsterdam and Paris, and the financial trade body, Insurance Ireland, this week called on the government for a review to help Ireland “convert expressions of interest into investment decisions”.Lloyd’s, which has long expressed fears that a post-Brexit UK would lose the passporting rights that currently enable the financial sector to operate throughout the EU, made its announcement less than 24 hours after Prime Minister Theresa May formally triggered the process to begin the country’s withdrawal from the bloc.Inga Beale, the company’s chief executive, told BBC Radio 4’s Today programme, “What we were after was some jurisdiction that had a really robust reputation for regulation, we also wanted to be able to access talent and we wanted really good accessibility. Brussels came out top of our list.”

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Will others join Lloyd’s in Brussels?

Sarj Panesar, global head of business development for insurance at Societe Generale Securities Services, commented, “The next question is how many of the other UK-domiciled insurers and reinsurers will follow. We can expect some to join Lloyd’s in Brussels.”The announcement came as Lloyd’s reported pre-tax profit of £2.1 billion for 2016, with gross written premiums rising 11 per cent to £29.9 billion. However, underwriting profits were down £500 million in the wake of claims following natural disasters such as wildfires in Canada and Hurricane Matthew.Ms Beale said the results underscored the need to deliver “real value for money” and reducing costs. She added, “This has been a year of challenge for the insurance sector with premiums once more under continued downward pressure.“It is vital that the corporation does everything it can to support the market and make the platform attractive, whilst demonstrating value for money. Our collective focus must be on providing customers with the products they want, embracing innovation and modernisation.”For related news and features, visit our Brexit section.Access hundreds of global services and suppliers in our Online Directory  Get access to our free Global Mobility Toolkit

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