The fallout from the UK’s vote to leave the European Union, or Brexit as it’s more commonly known, could result in lost business for the London insurance and reinsurance market, unless the UK government can negotiate continuity of passporting rights.
Brexit was always going to hit the insurance and reinsurance sector in London, with Lloyd’s of London, London market re/insurers and even some ILS fund managers potentially exposed to business difficulties if the ability to easily passport into the EU was lost, or hindered.
Fitch Ratings warns this morning that “Brexit could lead to a loss of business for Lloyd’s of London unless the UK government is able to negotiate passporting arrangements to maintain access to the European Economic Area (EEA).”
Without those passporting rights, UK and London based insurance or reinsurance players wanting to underwrite risks from the EEA would have to set up entities within the EEA to achieve that.
Fitch said it believes that this could lead to business moving away from the Lloyd’s platform, which would hurt London as a financial and re/insurance hub. The EEA accounted for £2.9bn or 11% of Lloyd’s gross written premium in 2015, according to Fitch.
Click Here to read more and view full article