Brexit is a “grave concern” for the London market, senior industry figures have said, warning of job losses and a huge risk to business.
The International Underwriting Association of London (IUA), Lloyd's of London, and Richard Brindle, CEO of Fidelis, have jointly published a paper on the potential dangers
Job losses are highly likely among the 34,000 people employed directly in the City of London’s commercial insurance sector, the paper warned.
Further job losses are likely among the tens of thousands indirectly employed, it added.
Underwriting firms are already making contingency plans to open offices elsewhere if the UK votes to leave the EU, the paper stressed.
On the same point, Mike Holley, Equinox’s CEO, spoke to Reactions in May about its plans to redomicile in a European country in the case of an exit.
Foreign capital is likely to leave for more trade-friendly jurisdictions, according to the new paper.
It argues that insurers staying based in the UK following a vote to leave will still be subject to EU regulatory standards, but without any say in how rules are formed.
Those companies will be also be forced to re-arrange cross-border insurance trade deals with almost all significant continental markets, it added.
Dave Matcham (pictured), IUA chief executive, said: “Feedback from our members clearly shows that the benefits of EU membership are highly valued and the possibility of these advantages disappearing is of grave concern.
“An IUA member survey shows at least six firms would reconsider the legal status of their London operations in the event of a
The paper noted that Brexit campaigners have suggested that trade with the EU is a one-way affair for
According to IUA and Lloyd’s figures, roughly 16% of the market’s business comes from other EU countries, about £9.6bn in total, and that the figure is growing.
Business written by IUA member companies was up 29% between 2010 and 2014, yielding
Inga Beale (pictured), Lloyd’s chief executive, said: “Lloyd’s sits at the heart of the London insurance market and it is the global scope of our activities, the framework that we provide to transact insurance business across the EU and the rest of the world that attracts the industry’s leading talent and most committed investors to London.
“Lloyd’s firmly believes that to remain part of the EU is in the best interests of the Lloyd’s market and of the wider London insurance market, which contributes £12bn to the UK economy and employs over 34,000 people in London alone.”
Brindle added: “Brexit would jeopardise our leading position, and bring no advantage from any perspective, whether regulatory, economically or for our reputation. It’s highly likely that if we were starting a business post a Brexit vote, we would be headquartered elsewhere in the EU.”