While Lloyd’s of London welcomes the progress in the Brexit negotiations between the European Union and the UK government, there’s no stopping the insurance market from setting up its subsidiary in Brussels.
The two sides of the talks issued a joint report on Friday, outlining progress during the first phase of negotiations – meaning phase two is up next, which is welcome news for the financial industry. The report was released ahead of a European Council meeting on December 14-15.
“Both parties have reached agreement in principle across the following three areas under consideration in the first phase of negotiations, on which further detail is set out in this report: a. protecting the rights of Union citizens in the UK and UK citizens in the Union; b. the framework for addressing the unique circumstances in Northern Ireland; and c. the financial settlement,” read the report. “Progress was also made in achieving agreement on aspects of other separation issues.”
Reacting to the development, Lloyd’s chief executive
Inga Beale commented: “We are pleased that the Brexit talks can now enter the second phase focusing on trade, and that agreement has been reached on the rights of EU citizens in the UK.
“However, the insurance sector still urgently needs certainty on the UK’s future trading relationship with the EU.”
Beale cited
proposals by the London Market Group (LMG) aimed at ensuring mutual insurance and reinsurance market access post-Brexit. “If the LMG’s proposals are adopted, neither the EU nor UK would have to sacrifice market access or control over their respective regulatory regimes,” she said.
“We therefore remain very keen to see an agreement that puts in place a sensible transition period and a broad and expansive post-Brexit free trade agreement, which includes the financial services sector,” the CEO added. “In the meantime we continue to move ahead with our plans to establish a Lloyd’s subsidiary in Brussels – which will provide certainty for the market and our clients.”
Meanwhile industry bodies have expressed optimism following the latest update in negotiations.
“It is good to see progress in the Brexit talks,” commented Association of British Insurers director general Huw Evans. “We hope that this can pave the way for substantive commitments in 2018 on both transition arrangements and the future trading relationship with the EU.”
For Miles Celic, chief executive of TheCityUK, the agreement to move beyond the first phase is a “positive and encouraging step” in the Brexit talks.
“For the financial and related professional services industry, our critical issues must now be progressed,” said Celic. “Negotiating arrangements on a transition with robust legal and regulatory underpinnings must be an absolute priority.”
Like LMG, TheCityUK wants a free trade agreement (FTA) in place.
“We urge the UK and the EU to now focus on negotiating an ambitious, comprehensive, and bespoke free trade agreement,” continued Celic. “Given the dominance of services to both the British and EU economies, it is essential that an FTA covers goods and services, and is based on mutual recognition and regulatory cooperation.
“This will be in the best interests of the UK, the EU27, and for global stability. It is also vital that existing services contracts can be grandfathered post-Brexit. This will be vital for continuity of service to customers and clients. The FTA between the UK and the EU will be a significant part of ensuring this into the future.”
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