Aviva to move £9bn to Ireland ahead of Brexit
Britain’s second largest insurer yesterday announced it will move £9bn worth of assets to Ireland as it prepares for Brexit.
Aviva, which has more than 14.5 million policyholders, received approval from the High Court in London to transfer €9bn (£7.8bn) to Dublin.
It follows approval earlier this month to move £1bn to the Irish capital. The move is timed for 10.59pm on 29 March, one minute before Britain leaves the EU, and is designed to deal with the consequences of a no deal.
Under this scenario, UK-based financial services firms will lose passporting rights that allow them to function in the European Union‘s single market, the world’s richest trading bloc.
Approving the switch to Dublin, Mr Justice Snowden said: “The evidence of [the transferor] is that the uncertainty over the Brexit negotiations means that if it delayed further and did nothing, there is a real risk that substantial numbers of policyholders would be materially prejudiced in event of a hard [no-deal] Brexit by the loss of [the transferor’s] EU passporting rights.”
He added that a hard Brexit would mean Aviva could not service policies through its overseas branches or pay policyholders’ claims in the EU.
Several banks – including Barclays, Royal Bank of Scotland, Lloyds, Goldman Sachs, Morgan Stanley and a host of others – have set up continental hubs in preparation for Brexit.
This involves hundreds of jobs and hundreds of billions in assets being shifted out of London, hitting the Treasury’s tax revenue and denting the capital’s reputation as a financial centre. Frankfurt, Germany’s financial capital, is one of the biggest beneficiaries of Brexit.
The ruling came shortly after a major EU agency failed in a High Court bid to use Brexit to get out of an estimated £500m bill for its Canary Wharf lease.
The European Medicines Agency (EMA) argued that its 25-year lease has been “frustrated” by the UK’s imminent departure from the EU, meaning it should not have to comply with the terms of the lease after Brexit.
But Canary Wharf took the agency to court to enforce the lease, saying that “however hard or soft Brexit may be, it is not sufficient to frustrate the lease”.
Mr Justice Marcus Smith agreed, ruling that the lease “will not be frustrated on the withdrawal of the United Kingdom from the European Union”.