Brexit: Insurance giant AIG turns to Luxembourg as EU departure makes UK less attractive
|
Version 0 of 1. American International Group, the global provider of commercial property insurance, said it plans to open an insurer in Luxembourg to write business in the European Economic Area and Switzerland once the UK exits the EU. “This is a decisive move that ensures AIG is positioned for whatever form the UK’s exit from the EU ultimately takes,” Anthony Baldwin, chief executive officer of AIG Europe, said on Wednesday in a statement. “We are ensuring that our clients and partners experience no disruption from the UK’s EU exit.” Financial firms are shaping their Brexit plans after Prime Minister Theresa May announced in January that the UK would leave the EU’s single market in 2019, likely spelling the end of passporting, where companies seamlessly service the rest of the bloc from their London operations. AIG currently writes business in Europe from a single insurer based in the UK. The New York-based company has more than 2,000 employees based in London and has already been cutting staff there and in other cities as part of a separate cost-cutting initiative. The reorganisation is expected to be completed in the first quarter of 2019, and AIG will retain an insurer in the UK for sales in that market, according to the statement. Nicola Ratchford, a spokeswoman for the insurer, said the company has a few employees already in Luxembourg. She said there might be shifts in the leadership ranks in Europe, but that it is too soon to know how many workers will move, or to comment on real estate decisions. AIG chief executive Peter Hancock said before the Brexit referendum last year that he’d consider an operations hub in continental Europe if UK voters opted to leave the EU. Luxembourg is among European cities seeking to attract banks and insurers that are looking to open EU hubs. “Luxembourg, a founding member of the EU, offers us a secure location in a stable economy with an experienced and well-respected regulator in continental Europe close to many of our major markets,” Baldwin said in the statement. AIG’s Europe segment had about $5.4bn (£4.4bn) in operating revenue last year, about 11 per cent of the insurer’s total, according to the company’s most recent annual report. Bloomberg |