LONDON — Lloyd’s of London said it would open a subsidiary in the heart of the European Union, the day after Prime Minister Theresa May began talks to take the UK out of the 28-state trading bloc.
“Following the United Kingdom’s decision to leave the European Union, a subsidiary office will be opened in Brussels with the intention that it will be operational for the January 1 renewal season in 2019,” Lloyd’s of London, the world’s oldest insurance market founded in 1688, said in its annual results statement.
Lloyd’s had created a shortlist of five possible destinations for the new subsidiary, choosing Brussels for its close proximity to European Union politicians and policy makers, the BBC said.
Lloyd’s, which focuses on marine, energy, and political risk insurance, needs a foothold on mainland Europe to ensure it keeps the right to operate across the remaining 27 EU nations. Business within the European Economic Area in 2015 accounted for £2.93 billion or 11% of Lloyd’s Gross Written Premium.
“It is important that we are able to provide the market and customers with an effective solution that means business can carry on without interruption when the UK leaves the EU,” Lloyd’s Chief Executive Inga Beale said in an emailed statement.
“Brussels met the critical elements of providing a robust regulatory framework in a central European location, and will enable Lloyd’s to continue to provide specialist underwriting expertise to our customers,” Beale said. “I am excited about the opportunities this venture will offer the market by providing that important European access efficiently.”
The UK government triggered Article 50 of the Lisbon Treaty and formally started negotiations to leave the European Union on Wednesday. It took the form of a six-page letter, and the UK’s permanent representative to the European Union, Tim Barrow handed it over to EU Council president Donald Tusk personally.
The Brexit process will likely strip the UK of its financial passport, with Theresa May’s government seeking to end freedom of movement for EU citizens and pull the UK out of the single market.
The passport is a system of common financial rules that allow UK based financial firms to access customers and carry out activities across the 28-nation .
In its results statement, Lloyd’s posted a pre-tax profit of £2.1 billion.