Lloyd’s of London, the world’s oldest insurance company is preparing to open a subsidiary in Europe next year, in anticipation of the Brexit fallout. The firm is considering five locations to establish its EU headquarters, rumoured to include Paris, Dublin and Frankfurt. Lloyd’s stated the decision was purely based on the need to maintain its EU Passport, which would allow it trade freely with the 27 other member countries of the European Union. “Following the referendum, we committed to looking at the options that would allow the Lloyd’s market to continue trading seamlessly with the EU,” said a Lloyd’s spokesperson. “This included establishing a subsidiary model amongst others. We will continue to develop our plans on creating a subsidiary and will provide a detailed update to the market on the progress we have made early next year.”
The insurer revealed that business within the European Economic Area weighed in at 11 percent of their Gross Written Premium, an amount equal to £2.93 billion. John Nelson, chairman of Lloyd’s of London, had warned before the vote passed that his company would consider other options if London lost its passport. “Insurance is a mobile business,” he said, as reported by the Financial Times. “In common with other financial institutions, we need to put our plans in place — at least on a precautionary basis.” Nelson hopes the City would keep its financial services passport rights, but the company is not willing to gamble on losing 4 percent of its annual revenue. “We have to plan on a contingency basis, so that’s what we’re doing. We’ve had some contingency plans in place for a while. We’re refining them at the moment … We have to have our plans ready to roll in the fairly near future.” Nelson revealed that the move out of London won’t constitute a loss for the firm or other companies leaving the city, but for the UK.