Insurance market Lloyd’s of London could be forced to move parts of its business to the EU unless single market access is secured in a post-Brexit Britain, chairman John Nelson has warned.
He called for clarity on the issue as Prime Minister Theresa May continues to thrash out with ministers what Brexit will mean in practical terms.
Speaking to the BBC Radio 4 Today programme, Nelson said: “London, the UK, is the global hub for specialist insurance and reinsurance. It’s one of the very few industries where the UK is right at the forefront.
“Access to the single market is important – it’s about 11 per cent of our business. There will be bits of the business, if we don’t get access to the single market, where it might be better for us and more efficient for us where we write it in the EU.”
Banks and financial firms wanting to trade with a country in the European Economic Area (EEA) must apply for a passport. Once authorisation has been granted, businesses then have licence to sell their products to any other country within the EEA.
Companies benefit because they do not have to apply for authorisation in each separate country once their initial passport has been approved.
Without having access to a passport, UK-based financial firms would face a barrier when attempting to trade with countries within the European single market.
Nelson added: “Access to the single market and passporting rights is obviously critical, not just for Lloyd’s but to the London insurance market and to large parts of the financial services industry.”
He said if access could not be assured, or if there was a prolonged period of uncertainty, Lloyd’s would have to consider “contingency plans”, warning that the “loser won’t be Lloyd’s, it will be London”.