Lloyd’s of London is leaning towards Luxembourg as its post-Brexit EU home.
Like many other financial services companies, Lloyd’s uses passporting rights to access other EU markets from its London base. However, those rights are likely to disappear after Brexit, so Lloyd’s is planning to set up a new EU base elsewhere. The vast majority of its operations will remain in London.
The insurance market had already narrowed its shortlist to five possible locations, and Luxembourg is emerging as its favoured option following recent meetings. Ireland, Germany, the Netherlands and Belgium are also under consideration. Germany is thought to be the least likely of the five, and Malta has already been ruled out.
Lloyd’s is due to announce its decision by the end of the first quarter and is still talking to several different destinations. Luxembourg’s favoured position was first reported by the Press Association.
Lawyers say that establishing an EU base could be more difficult for Lloyd’s than for more conventional insurers because it is a market consisting of many underwriters, rather than a company.
Lloyd’s said: “We are continuing to work through the process of establishing a subsidiary in the European Union and no decision has been taken on where that will be. We want to be able to provide our customers with a seamless access to the European Union and vice versa – as we know businesses in Europe will want to be able to access the Lloyd’s market.”
Lloyd’s chairman John Nelson, who is due to step down later this year, campaigned for a remain vote in last year’s referendum and also lobbied for the protection of passporting rights.
Many of the insurers that operate at Lloyd’s are also looking for alternative bases in the EU. A large number of them are leaning towards Dublin because of its language, legal system and proximity to London.