Despite government assurances that hasty relocation is not necessary, many insurers are opting to establish new hubs in the UK and Europe in order to get ahead of the potential ramifications of Brexit.
AIG, Allianz and Lloyd’s of London are among the entities ignoring the supposed reassurance of the grace period agreed between Britain and the European Union (EU) earlier this year. Hugh Savil of the Association of British Insurers (ABI) said that the ABI had ‘urged firms not to wait for and rely on a political process to deliver the answers’. This particularly applies to any possible relocation plans, he added, which often take a number of years to complete.
The moves to establish new hubs early are a pre-emptive response to what will be the new reality after the UK splits from the EU: that any European insurer selling policies in UK (and any UK / non-EU insurer with bases in the UK selling policies in Europe) will need specific regulated local hubs.
Munich Re’s Chief Executive said that they ‘are prepared for a hard Brexit’, while Paul Merrey, an insurance specialist at KPMG, said that he does not think ‘there is any going back’.