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Home / World / RPT ANALYSIS – Insurers pressed the shift button despite the Brexit grace period

RPT ANALYSIS – Insurers pressed the shift button despite the Brexit grace period



(Repeats May 4, no change to the text)

* Insurers try to set up turnstiles before the transition

* Transition to Phase 2 – Apply for licenses, hiring staff

* European Insurers seeking UK licenses

* Dublin, Luxembourg's popular EU hubs

By Carolyn Cohn and Huw Jones

LONDON, May 4 (Reuters) – Lloyd's of London, AIG, Alliance and others Insurers ignore commitments and set up new hubs in the UK and the European Union prior to Brexit in March 2019 to ensure access to customers.

The move comes despite a transition agreement between Britain and the European Union in March this year to prevent such transfers.

"We have asked companies not to wait for and rely on a political process to deliver the answers, especially relocation plans that take two years or more," said Hugh Savill of the Association of British Insurers ,

Insurers are driven by the fact that after Brexit, European companies selling policies in the UK and British and other non-EU insurers with British bases selling to Europe need to have local regulated entities.

Many who have been contacted by Reuters have said that they are beginning to implement the second phase of their Brexit plans ̵

1; submit license applications, hire staff, and change policies.

"We are prepared for a tough Brexit," said Joachim Wenning, CEO of Munich Re, the world's largest reinsurer, which has applied for British licenses.

Such planning was inspired by EU regulators who said the transition would not be ratified until October and could be derailed without agreement on other parts of the UK divorce.

"I do not think there is anyone behind," said Paul Merrey, an insurance-related partner at the consulting firm KPMG.

American insurer AIG has announced plans to open new offices in the UK and Luxembourg by December, and has begun shifting its policies from one country to another.

Meanwhile, the international unit of Japanese insurance company Sompo received approval last week for its Luxembourg subsidiary, which it said would be operational before the end of the year.

Even Lloyd's of London, the world's largest commercial insurance market, equated with the capital's financial center, will have its new Brussels office ready for January to kick-start policy renewal.

"Businesses need to take their future into their own hands, and Lloyd's is no different," said Chief Executive Inga Beale, while Lloyd's market operator CNA Hardy CEO Dave Brosnan said he receives a license for a Luxembourg subsidiary ,

EARLY SECURITY

The Bank of England says that the transition to free up financial institutions by the end of 2020 can be given immediately, so EU insurers will not have to request readmission for UK businesses next March.

It has also facilitated the rules for deciding whether operations by insurers from abroad can be continued as branches or converted into subsidiaries with their own capital, an expensive process that faces only a small number.

The BoE considers Britain and EU legislation necessary to disregard 10 million UK policyholders with £ 27 billion in liabilities and 38 million policyholders in the European Economic Area with £ 55 billion in debt.

Swiss insurer Zurich has reached an agreement with UK regulators on the general insurance business license, which is based in the EU in Dublin. British CEO Tulsi Naidu said she welcomes the attitude of the Bank of England and the UK government to "provide early assurance for incoming branches".

The German alliance also told Reuters that it wanted to apply for a branch license for one of its units in the UK. According to inquiries from brokers, Munich Re said that it was also in March for British licenses at low "double-digit" prices million-figure. "

Insurers also pull policies from London into new EU hubs to ensure that customers after the Brexit Day may continue to pay premiums and receive disbursements for cross-border contracts Year-end policies completed after March 29 of this year are at risk.

"NORMAL THIRD COUNTRIES"

Insurers are implementing Brexit plans, but the Staff movements are modest so far, far fewer than the expected number of thousands of bank branches, according to a Reuters survey.

Thirteen insurers who reported on the number of employees in the survey in March said that a total of 173 jobs have been created in the EU the EU, mainly in Dublin and Luxembourg.

The BoE stated on request from Reut It states that it received emergency plans from 170 insurers regulated by its regulator and 519 such responses from insurance companies in the European Economic Area and their national regulatory authorities.

A lack of clarity about future trade after the transition also accelerates insurers' Brexit moves.

While the UK wants a tailor-made trade agreement based on "mutual recognition", the Union is pushing its existing system of market access for "third countries" or non-EU members.

"We expect Britain to become a normal third country in the future," Wenning said. (Additional coverage by Tom Sims in Frankfurt and Alexander Hübner in Munich, edited by Alexander Smith)


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