AIG is off to Luxembourg.
The US insurer has unveiled its post-Brexit plans, saying that its response to a loss of passporting rights from London – where its European HQ is located – is to set up a new business in the Grand Duchy.
AIG already has a Luxembourgeois branch, but will set up a subsidiary there to serve clients in the EU after Brexit. That will require increasing the staff numbers from the current three, but the company will not say how many people will have to move there from London. It plans to retain a significant presence in the UK capital.
A spokesperson said: “Establishing a new company in Luxembourg will result in some changes at a Europe senior leadership level but wider impacts are expected to be minimal. There will of course be some positions to fill in our Luxembourg operation but this will be a gradual process over the next two years.”
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. But recently, destinations in continental Europe have become more popular.
The spokesperson added: “The decision to choose Luxembourg was taken after a thorough review process and for a combination of reasons. 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. It also offers an environment which is a hub for financial services generally, including fintech.”