09 March 2017

Financial Times: AIG to set up new base in Luxembourg to service EU business

AIG is to set up a new base in Luxembourg after the UK leaves the EU as the likely loss of passporting rights post Brexit has forced the US insurer to look for an alternative location to London from which to service EU business.

The choice of Luxembourg is a sign of a shift in attitudes in the insurance world. Immediately after the Brexit vote, there was an assumption that most insurers would decamp to Dublin where there is already a thriving reinsurance industry. Ireland was one of the locations that AIG considered.

Recently, destinations in continental Europe have become more popular. Lloyd’s, the insurance market, is likely to set up a new business in one of the Benelux countries, for example.

Anthony Baldwin, chief executive of AIG Europe, said: “This is a decisive move that ensures AIG is positioned for whatever form the UK’s exit from the EU ultimately takes.

“AIG sees opportunity in the ongoing resilience of the UK insurance market. At the same time, we are ensuring that our clients and partners experience no disruption from the UK’s EU exit.”

AIG, which has its European head office in London, added: “The majority of the business we will write out of the Luxembourg entity will be in continental Europe and geographic proximity is a benefit. Luxembourg is a core member of the European Union, and has a stable economy and an experienced and well-respected insurance regulator.”

The insurer would not comment on the number of staff that would have to move to the Grand Duchy, but it said there would be “some changes at a Europe senior leadership level”.

It still intends to retain a significant presence in London. “AIG will continue to support its European operations from the UK,” the company said.

AIG’s move comes as London’s specialist insurance industry steps up its lobbying efforts ahead of the UK’s Brexit negotiations.

Full article on Financial Times (subscription required)

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