Lloyd's of London could move some business to EU if access to single market isn't guaranteed
Revered insurance market and one of the country’s oldest institutions, Lloyd's of London, said it would move part of its business to the European Union if the UK does not maintain access to the single market after voting to leave the trading bloc.
"If we do not get access to the EU single market, what will happen is that business will be written by us and others onshore in the EU," Lloyd’s chairman, John Nelson told the BBC Radio 4 Today programme on Monday.
“So in a sense, the loser will not necessarily be Lloyd’s or the industry. Sadly, it would be London.”
The EU is important to Lloyd’s business as it accounts for about 11% of its £25bn in gross written premiums.
Before the June EU referendum, Lloyds said at least 34,000 jobs could be at risk in the insurance industry and it, along with other insurance companies, were putting together contingency plans if there was a Brexit vote.
In the wake of the Brexit vote some insurers said they are looking at plans to set up regulated subsidiaries in the EU.
"If we do not see a clear direction of travel, we will have to invoke our contingency plans and that would mean moving business, or businesses leaving London, more quickly than say the renegotiation timetable. So therefore clarity is important, clarity fairly soon,” Nelson added.
He said that the single market and passporting rights, which makes it easier for financial institutions to do business with EU clients, is important to the financial services industry.
Nelson also maintained it will not move the market’s headquarters away from London: “Our centre will remain in London come what may.”
Prime Minister Theresa May said “Brexit means Brexit”, but it is unclear what that means. Brexit secretary David Davis previously said he would “ideally” seek access to the single market with curbs on immigration in negotiations with the EU.
At the G20 summit in China on Sunday, Japan waded in on the debate and warned that its biggest companies could leave the UK of it loses access to the single market and move to the EU. Japanese companies make up about 16% of Lloyd’s business.
May told the BBC's Andrew Marr on Sunday: "I don't want to adopt a particular model, and people use phrases about access to the market, about customs unions and so forth, I prefer to look at it and say let's work out what the best deal for us will be in trade in goods and services, and then let's be ambitious and go out there and find it."
May said, so far, no to a points-based immigration system, no to an extra £350m a week extra for the NHS and no to a cut in VAT on fuel.