Albert Isola, Gibraltar minister of commerce
10 April 2017 Insurance

Gibraltar may attract insurers in the wake of Brexit, says minister of commerce

As the UK leaves the EU, Gibraltar, a British Overseas Territory, may attract insurance businesses from within the remaining EU countries looking to keep their passporting rights into the UK, Minister of Commerce Albert Isola suggested in conversation with Intelligent Insurer.

Insurers based in an EU country which have passporting rights into the UK may lose this ability as a result of Brexit negotiations. Around 750 insurance businesses passport from an EU country into the UK. They may choose to exit the UK business if it is considered too small, or create a subsidiary in the UK to ensure continuity as the UK negotiates the terms of its exit from the EU. But Gibraltar may offer an alternative to these companies.

“We believe that it does open up some opportunities for us,” said Isola. “We’ll be looking to see to what extent we can provide that option to those businesses.”

The strong links to UK make Gibraltar a serious alternative to creating a new subsidiary in the UK.

“The UK has already confirmed last October that arrangements for passporting post Brexit between Gibraltar and the UK will continue,” Isola said.

Gibraltar conducts around 92 percent of its financial services business with the UK. “It’s tried and tested,” Isola said.

The associated territory offers the advantage of an easy-to-work-with jurisdiction, according to Isola. “There aren’t many jurisdictions where, when you need to meet the regulator you can ring up and go and see him the next day and discuss something new that you are planning,” Isola said.

Gibraltar currently has 40 active insurance companies, most of them motor insurers. The regulator adapted to the changing needs of the insurance sector as technology plays an increasing role in the business. The regulator did, for example, set up a new innovation team to assist companies in implementing new technology such as blockchain.

“I think we are well-placed for the future,” Isola said.

Insurers selecting Gibraltar could also benefit from a corporate tax rate of 10 percent which compares to 19 percent in the UK.

But taxes are only one part of the equation, Isola said, noting that the whole package is important, including a qualified labour force and the regulatory environment.

Other advantages are the close ties to the UK. Professionals in Gibraltar are UK qualified, the jurisdiction uses British business practices and operates under English common law.

The arguments for setting up business in Gibraltar may have already convinced some.

Since Brexit, the regulator granted 21 licences in Gibraltar across all financial services and there are 22 in the application stage since Brexit, according to the government.

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