One of the world’s oldest insurance markets is preparing a Brexit “contingency plan” to make sure it can keep trading when the UK leaves the European Union.
Britain’s Lloyd’s of London, the non-stock market listed group which focuses on marine, energy, and political risk insurance, confirmed to the BBC in an interview that it is looking at possibly setting up a subsidiary in a country that will still be part of the EU because of a Brexit will likely strip the UK of its financial passport — the right to operate across the remaining 27 EU nations.
Lloyd’s of London’s CEO Inga Beale told the BBC that the Brexit fallout “is a major issue for us to deal with” and that leaving the EU could make the group lose 4% in revenues so it is looking to set up a subsidiary or branches within the bloc to make sure it counteracts some of that hit.
“It’s the lack of certainty for our clients. Business cannot hang around,” she said. “Boards are going to insist that they make plans [for life after Brexit]. Boards are going to insist that they make plans [for life after Brexit],” said Beale to the BBC.
“Some people may end up doing their jobs in other parts of Europe rather than in London.”
According to new figures from the Financial Conduct Authority, released by the House of Commons’ Treasury Select Committee this week, 5,476 UK firms have at least one passport that allows them to do business in other EU and European Economic Area nations. Many firms hold several passports, meaning that the total number in the UK stands at 336,421.
The loss of passporting rights following Brexit is probably the biggest fear in the City of London right now. If the passport is taken away, then London could cease to be the most important financial centre in Europe, costing the UK thousands of jobs and billions in revenues.