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Lloyd’s Brussels platform is intended to head off potential loss of passporting rights as the UK leaves the EU. In the absence of a new legal entity, loss of passporting rights would leave Lloyd’s unable to issue policies directly in Europe that accounts for £2.93bn, or 11, of its gross written premium.
Lloyd’s said the new company will be ready to write business for the 1 January 2019 renewal season. It will write risks from all EU and European Economic Area states.
Inga Beale, chief executive of Lloyd’s, said: “It is important that we are able to provide the market and customers with an effective solution that means business can carry on without interruption when the UK leaves the EU.”
Lloyd’s also reassured buyers that, for now, it is business as usual at the 329-year-old insurance market.
Despite the triggering of Article 50, the UK remains a full member of the European Union for at least two more years. As such, there is no immediate impact on existing policies, renewals or new policies, including multi-year contracts, written during this period of time, it said.
The announcement ends months of speculation over the possible location of the Lloyd’s planned EU hub. Brussels was chosen from a shortlist of six locations that included Luxembourg, Dublin, Frankfurt, Malta and Paris. Earlier this week Reuters reported that Lloyd’s had narrowed the field to Brussels and Luxembourg.
Lloyd’s said that it opted for Brussels because of its strong regulatory framework. Dublin was the early favourite, but it is thought that Brussels and Luxembourg offered more flexible capital requirements, allowing Lloyd’s to reinsure more business back to London.
“Brussels met the critical elements of providing a robust regulatory framework in a central European location, and will enable Lloyd’s to continue to provide specialist underwriting expertise to our customers,” said Ms Beale.
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