We all know that the UK voted on 23 June to leave the European Union and “uncertainty” has been a major concern, not least for the insurance market. There’s been a long debate on whether London can expect to maintain its position as the global heart of specialist insurance after Brexit. According to Deutsche Bank’s chief executive John Cryan, London will remain Europe’s main financial centre. The most important question now for chief executives throughout the sector is ‘How will Brexit affect access to the single market?’
First and foremost it is important to highlight the London insurance market as the largest global hub for underwriting commercial and specialty risk with 59 per cent of international insurance premiums written in London. It is a diverse market made up of more than 350 companies, contributing more than 20 per cent of the City’s GDP and employing 48,000 people.
With this is mind London is not going to be prepared to risk its place in the market and the actions and opinions of the industry certainly reflect this. In a statement released in June after the referendum, Inga Beale, Chief Executive of Lloyd’s noted that Lloyd’s and the London insurance market will adapt to the new environment. As such, Lloyd’s is pressing ahead by implementing their contingency plan, which is designed to ensure the industry will continue to trade in key European markets.
Preserving passporting rights is essential but the insurance sector will need to remember that 80 per cent of the industry’s business comes from beyond the EU’s borders. There are plenty of opportunities to drive new trade with nations outside the European Union.
The capital will continue to enjoy the benefits of timezone and financial infrastructure. In addition, the access that London has to European money is based on proximity and historic relationships, not on being part of the EU. London is and will remain the global centre of insurance excellence even after Brexit.
In his latest statement, John Nelson Chairman of Lloyd’s stated, “Lloyd’s will always be centred in London and that is not about to change. However, it is important to us that we can continue to transact business in the European Union. We know this is what businesses here and in the European Union want, and it is incumbent on us to ensure that the Lloyd’s market remains open for EU business.”
So, don’t despair, as London will not lose its crown.