Lloyd’s sets up Brussels base
LLOYD’S of London will set up a European subsidiary in Brussels to avoid losing business when Britain leaves the EU.
The 329-year-old insurance market, whose continental business generates about 11 per cent of its premiums, wants to be ready to write business for the January 1, 2019, renewal season from all 27 EU and three European economic area states.
Dozens of jobs will be moved to Belgium by Lloyd’s, which employs about 700 people in London out of a global workforce of 1,000.
The move was announced alongside annual figures showing flat pre-tax profit of £2.1billion, as Lloyd’s battled “extremely challenging” trading conditions after a squeeze on prices and above average claims, due mainly to Hurricane Matthew and the Fort McMurray wildfire in Canada.
Major claims increased from £700million to £2.1billion, the fifth highest since the turn of the century.
Underwriting profit dropped from £2billion to £500million, partially offset by an improved investment return of £1.3billion compared with £400million in 2015, as well as foreign exchange gains.
Lloyd’s chief executive Inga Beale, pictured, said: “This has been a year of challenge for the insurance sector with premiums once more under continued downward pressure.
“Our collective focus must be on providing customers with the products they want, embracing innovation and modernisation. It is critical throughout 2017 we continue to demonstrate that Lloyd’s is the home for creativity and expertise.”
She said Brussels had been chosen for its “robust” reputation for regulation, enabling Lloyd’s to “continue to provide specialist underwriting expertise to our customers”.
Lloyd’s chairman John Nelson said: “Some veterans have said to me they have never seen conditions as consistently tough as they have been over the last few years. Additional capital continues to come into our market, driven by low interest rates and investment returns, alongside a relatively benign claims environment, combining to put relentless pressure on premiums.
“Some may say change must come soon but, until it does, we must continue the unrelenting focus on underwriting discipline that drove us through 2016 and into 2017.”