A growing number of global insurers are considering moving to Ireland following the British vote to leave the European Union, the Central Bank said yesterday.
Ireland is one of a handful of European countries that may benefit from companies moving away from Britain as it leaves the EU, and the Bank has seen a notable increase in inquiries from financial services firms.
“An increasing number of global insurance groups are considering seeking a new authorisation in Ireland, particularly to locate their headquarters for European business,” the Central Bank said in its biannual macro-financial review of the economy.
Insurers are reliant on so-called passporting rights to sell policies throughout the EU and several have said that they will need to set up EU subsidiaries in the event of a hard Brexit.
Neon Underwriting Ltd, an insurer operating in the specialist Lloyd’s of London market, yesterday became the latest to say that it was considering a move to Dublin if Britain failed to get passporting rights in Brexit talks, according to its chief executive.
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Lloyd’s is working on plans to move some business to the EU, aiming to be ready for the shift as soon as Britain starts divorce proceedings from the bloc.
“We are looking at our own plans as well should the Lloyd’s contingency plans not work out or should we feel that our plans may be better suited for us,” Martin Reith, the Neon chief executive, said.
“That would include potentially a Dublin platform with passporting rights across Europe, to give us access to the business that we need.”
Neon, which earns about 20 per cent of its premiums from Europe, is a member of Great American Insurance Group, whose members are subsidiaries of American Financial Group Inc.
American Financial Group already has a Dublin base, Mr Reith said.
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Dublin is one of five European cities being considered by Lloyd’s itself, with other possible locations including Paris and Frankfurt.
The Lloyd’s underwriters Hiscox and Beazley, the US insurer AIG and the motor insurer Admiral have also said that they might shift operations from London to centres such as Dublin.
Insurance firms initially met the Irish Central Bank from a “fact-finding perspective” but enquiries have since hardened, Ed Sibley, director of credit institutions supervision, said. He expects decisions could be made in the first or second quarters of 2017.
Theresa May, the British prime minister, has said that she wants to begin the two years of EU exit negotiations by the end of March, when banks, insurers and asset managers are expected to start finalising their plans.
Mark Carney, the governor of the Bank of England, has said that banks may start to relocate activities to other countries 12 to 18 months before Britain’s departure from the EU if a hard Brexit looks likely.
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The Central Bank said that Ireland may be the preferred location of some UK banks that choose to relocate within the EU and may be a jurisdiction of choice for some UK funds that will likely seek to re-domicile elsewhere in the EU.