Lloyd’s pushes for passporting as Brexit threatens £800m GWP

Lloyd’s estimates that £800m of its gross written premium (GWP) could be affected if access to the single market is lost because of Brexit.

This accounts for 4% of its £26.6bn total GWP.

The insurance market made the estimate in a document outlining its plans to deal with the UK’s pending exit from the European Union, which puts UK insurers’ access to the European Economic Area (EEA) at risk.

Lloyd’s said in the document that it has been working on plans to protect its access to the European market and that its “strong preference” is to use a passporting system similar to the one in use today.

The market said it was “engaging with UK government at all levels” to push for similar passporting arrangements to the ones in existence.

It said it is also entering discussions with regulators across the continent, maintaining a dialogue with the market, industry, coverholders and customers, and conducting further analysis of the EEA territories and their impact on Lloyd’s.

The document said: “The team which will oversee this programme has years of experience in securing trading rights for Lloyd’s – this is their day-to-day work.

“They have an expertise unrivalled in the City of London, obtaining licenses in some of the most demanding parts of the world from India to China. They are now fully engaged in this process.”

Lloyd’s estimates that it derives £2.9bn GWP, 11% of its total GWP, from the EEA. Of that, £1.1bn is reinsurance, which Lloyd’s expects to be unaffected. Some £557m of the remainder is marine, aviation and transport (MAT) business, while £1.2bn is non-MAT. Of this non-MAT business, £800m is written cross-border and most likely to be affected by the UK’s withdrawal from the single market.

Lloyd’s held a breakfast meeting today with chief executives of managing agents to discuss the outcome of the vote to leave the EU. It plans to hold a further meeting on 4 July.

The market said it is also working closely with the UK government HM Government, European governments and regulators on the next steps.

Lloyd’s chairman John Nelson is attending a meeting of the Prime Minister’s Business Advisory Group today, and has also been invited to attend a meeting with business secretary Sajid Javid next week.