FM Global gains Luxembourg license for EU hub after Brexit
Commercial and industrial property insurer FM Global has been granted insurance license in Luxembourg where it will set up a new hub to write business across the European Economic Area (EEA) once the UK leaves the European Union.
The license to FM Insurance Europe, a newly-formed subsidiary, will allow the company to continue delivering insurance coverage to its policyholders throughout the EEA, where it has operated for more than half a century.
Chris Johnson, executive vice president, will serve as the managing director of the new EU subsidiary.
"We chose Luxembourg as our EEA hub because it’s a multinational business-friendly financial centre with regulatory expertise that enables us to remain true to our mutual insurance company business model,” said Johnson said. "Most notably, Luxembourg is a hub that permits EU passporting—which fits our business model perfectly."
The passporting mechanism provides a company authorised in one member state the ability to conduct cross-border business without being required to apply for any additional authorisation or hold assets locally.
FM Global further stated that its London operations will remain a critical part of its business strategy.
Several other insurers like American International Group (AIG) and Bermuda-based Hiscox have also planned to launch their new entities in Luxembourg.
Lloyd’s of London has selected Brussels, and Markel Corporation has planned to capitalise a German insurance company in Munich post-Brexit.
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