Lloyd's of London will provide more insight into its Brexit preparation plans early next year, when it unveils the timetable for moving part of its business to another EU member state, with Ireland, France and Germany among the front-runners for its new foreign setup.
The insurance giant is in the process of choosing a destination from a shortlist of five countries, and City A.M. understands that Dublin, Paris and Frankfurt are three of the locations being considered.
“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."
We believe it is in the interests of the City to have ease of access to the EU’s single market and we will continue to work with both the industry and the Government in any way we can on this.
Earlier this year, Lloyd's boss John Nelson said London's status as a global insurance leader had been put at risk by the result of the EU referendum. He also said the company was looking into moving business out of the City, and warned: "It won't be Lloyd's losing out, it will be the UK."
Nelson told City A.M. he was "hopeful" the UK could strike a deal with the rest of the EU to preserve the financial services passport, which lets firms do business across the other 27 members from a UK headquarters. However, he added: "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."
Clifford Chance insurance partner Ashley Prebble said today that by announcing a timetable, "Lloyd's has made it clear that they, like many other UK based financial services businesses, have developed relocation plans which they will need to implement ahead of Brexit".
"As these plans have a long lead in time to implement, firms simply cannot afford to wait for the government to reach agreement on their Brexit strategy, and so will continue to plan and consider implementing strategies that guarantee access to the single market," said Prebble.
It also puts into stark focus the need for transitional arrangements so that these businesses have time to plan based on any new deal reached with the EU.
Ahead of the referendum, Lloyd's chief risk officer Sean McGovern said that Brexit would "create a level of uncertainty, for Lloyd’s, for the London market, as well as the UK and European economies, we have rarely experienced".