3 June 2016 Insurance

Brexit poses threat to London insurance jobs and business, says market leaders

Market leaders of the International Underwriting Association of London (IUA) and Lloyd’s, as well group chief executive officer of Fidelis, Richard Brindle, have warned of job losses and a significant risk to business in London’s insurance market if Britain votes to leave the EU.

In a position paper put forward by the market leaders, they said job losses are highly likely amongst the 34,000 people employed directly in the city’s commercial insurance sector.
They predicted further job losses are likely among the tens of thousands indirectly employed, and that underwriting companies are already making contingency plans to move elsewhere if Britain votes to leave the EU. It was also predicted that foreign capital is likely to leave for more trade-friendly jurisdictions.

The paper also suggests that insurance companies that stay in the UK following a vote to leave will continue to be subject to EU regulatory standards, but without any say in how they were formed. Those companies will be also be forced to re-arrange cross-border insurance trade deals with almost all significant continental markets.

Dave Matcham, chief executive of the IUA, said: “Feedback from our members clearly shows that the benefits of EU membership are highly valued and the possibility of these advantages disappearing is of grave concern. An IUA member survey shows at least six firms would reconsider the legal status of their London operations in the event of a leave vote, though there may be others. Passporting rights within the single market are particularly important, ensuring that firms are not obliged to maintain expensive capital holdings in each of the EU member states in which they operate.”

Inga Beale, chief executive of Lloyd’s, added: “Lloyd’s sits at the heart of the London insurance market and it is the global scope of our activities, the framework that we provide to transact insurance business across the EU and the rest of the world that attracts the industry’s leading talent and most committed investors to London. Lloyd’s firmly believes that to remain part of the EU is in the best interests of the Lloyd’s market and of the wider London insurance market, which contributes £12 billion to the UK economy and employs over 34,000 people in London alone.”

Brindle commented: “London has centuries of insurance history, and remains the world’s leading insurance market, largely because it is outward-facing. It attracts foreign investment because companies in Britain can access the EU and the global market through a single operation. Brexit would jeopardise our leading position, and bring no advantage from any perspective, whether regulatory, economically or for our reputation. It’s highly likely that if we were starting a business post a Brexit vote, we would be headquartered elsewhere in the EU.”

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk