Insurance and reinsurance marketplace Lloyd’s of London is expecting to have completed the transfer of policies to its new Brussels subsidiary by the end of the Brexit transition period in 2020, according to Hayley Spink, Director of Lloyd’s Brexit Programme.
Speaking as part of a panel at the Fitch Insurance Roadshow 2019 event in London last week, Spink acknowledged that the transfer would be a monumental process for Lloyd’s, but remained confident that it could be completed by year-end 2020.
“We’re going to need the entire transition period for sure,” she said. “We’re looking at the moment to see how we can expedite that as much as possible to make it as least painful for the policyholder. That’s the key thing for us, and certainly for our distribution channels as well.”
Asked whether the transfer process may extend beyond 2020, Spink replied: “Well we’re certainly working towards that date, and all the plans that I have in front of me are showing that we will … So yeah, come what may we will make that happen.”
Lloyd’s established its new European hub in Brussels last year to ensure that re/insurers operating in its market can guarantee continuity of service to customers in the European Union (EU) following the UK’s planned departure in March 2019.
The Belgian subsidiary began underwriting in January 2019, but the process of moving Lloyd’s UK contracts over to the EU unit is expected to be considerably more challenging than for other insurers using a similar Brexit strategy.
“Parts of it are going to be huge for Lloyd’s,” Spink told panellists at the Fitch event. “You know, we’re going right back to the days of R&R in the nineties and any policy that had any EEA element within it is going to need to be transferred into Lloyd’s Brussels.”
“It’s going to be far more complex than it would be for a straightforward insurer,” she continued, adding that Lloyd’s has been “really lobbying hard to try to find a political way of dealing with this.”
Lloyd’s is currently in discussions with European regulators to see if it can avoid going through a costly Part VII transfer, which would involve sending out individual notices to every affected policyholders.
While these bodies have been “supportive” of Lloyd’s preparations for Brexit, current arrangements will waste a lot of time and effort for UK insurers, as well as distribution channels and policyholders, Spink warned.
“We had to start our preparations of course and we’re moving as fast as we need to, with a view to seeing actually what will come out of an agreement at some point in the future,” she said.
