October 2016
The potential end to passporting services for UK-based companies in the wake of Brexit puts £7.34bn ($8.96bn) of London premium at risk, according to the International Underwriting Association (IUA).
In its annual statistics report on the London company market, released today, the IUA said the potential business at risk included £1.36bn of European premium written in London by firms either headquartered in the UK or based in a non-EU country and using London to access EU business.
Those with parent companies based in the UK accounted for £267mn of this figure, with £1.09bn attributable to companies using London as a gateway to Europe.
The remainder of the potential premium at risk, approximately £5.97bn, comprises international business written in London by firms headquartered or with a parent company elsewhere in the EU.
Gross written premiums in EC3 totalled £15.15bn in 2015. Some £6.49bn of this was written in other locations but overseen by London operations.
Of the business controlled by London, 35 percent (£2.29bn) originated in continental Europe, making it the largest contributor of such premiums in the past two years, overtaking regional offices in Britain and Ireland.
Overall premium income for the London company market – which combines both London and controlled premiums – totalled £21.65bn in 2015, of which continental European business contributed £4.95bn.
However, the IUA warned it was difficult to estimate how much of the identified European business would continue to be placed in London following Brexit, given the uncertainty surrounding the negotiations and to what degree current arrangements will be retained.
IUA chief executive Dave Matcham said the report revealed the necessity of the open trading relationship between the London market and Europe.
He commented: “It is vital that a level playing field is maintained so that companies can operate freely without any need for local licences, regulatory collateral obligations or other special requirements. The arrangement must be reciprocal.”
