A host of insurers have been racing from the UK to Luxembourg, one of the countries they have chosen as their European base in response to the UK-EU split.
Now a
Financial Times report has cited a Luxembourg agency official who is predicting a wearing down of London’s dominance in the realm of specialist insurance.
“You’ll see a slow erosion of London’s dominant role,” stated Luxembourg for Finance (LFF) chief executive Nicolas Mackel, as quoted by the report. “London will no longer be the natural choice or the obvious choice.”
LFF is a public-private partnership between the Luxembourg government and the Luxembourg Financial Industry Federation aimed at developing the country’s financial services industry. It has been trying to woo firms to make the switch to Luxembourg.
“In insurance I was impressed by the herding effect,” the report quoted Mackel as saying. “
AIG was the first to come, and that had a pull effect.”
In March American International Group (AIG) announced it will locate an insurance company in Luxembourg to maintain its operations across the European Economic Area post-Brexit. This means AIG will have two subsidiary insurance firms in Europe – the one in Luxembourg to write business for the EEA and Switzerland, and the other in the UK to write UK business.
Barely two months ago the London Market Group launched a campaign promoting London as the world’s insurance hub.
“The London insurance market has played an essential role in enabling people to realise their ambitions for centuries, but we have not always articulated the benefits of doing business in London as clearly as we might,” explained
Beazley chief executive Andrew Horton when the campaign was unveiled. “With increasing international competition, we need to tell our story.”
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