London market seeks new EU cross-border deal for insurers

The London Market Group (LMG) is calling for a new trade deal between the UK and the European Union that will allow insurers to operate across borders.

 

In a statement reported by Reuters, LMG chairman Nicolas Aubert said the lobby group is working with the UK government to look for “existing precedents in current international agreements which could be used for the Brexit negotiations to support our industry.”

 

Aubert called the potential EU trade deal “crucial” with about £8 billion in insurance premiums from the regional bloc written in London every year.

Want the latest insurance industry news first? Sign up for our completely free newsletter service now.

 

According to the report, the LMG is also seeking a guarantee of regulatory equivalence with EU capital rules.

 

“We expect that the EU will not permit UK undertakings to carry on business in the EU if there is a fundamental divergence in regulatory standards,” Reuters quoted LMG as saying.

 

The trade body is likewise calling for a transition period to implement any new arrangements after Brexit.

 

Prime Minister Theresa May is expected to trigger Article 50 this month to signal the start of the formal Brexit negotiations. Meanwhile, some insurance companies are reportedly preparing their post-Brexit plans, which include relocation of their operations away from the UK.

 

On Wednesday, insurance giant AIG announced plans to locate an insurance company in Luxembourg to keep its operations across the European Economic Area and Switzerland once the UK departs from the EU.

 

Lloyd’s of London is also setting up a European base outside Britain. It is expected to reveal the location “likely to be somewhere on the continent” within the first quarter.