This week AIG announced that it will set up a new base in Luxembourg to service EU insurance business after Brexit. It should be noted that this is not the beginning of the end of London as a financial capital. The insurer still intends to retain a significant presence in London and was quoted as saying “AIG will continue to support its European operations from the UK” .
This is the beginning of business getting on and taking strategic decisions without waiting another 2 years for the politicians to negotiate a final Brexit deal. We will see more of this over the coming months.
Lloyd's have also signalled that they will be taking a decision shortly about where to establish a subsidiary operation (again supported from the UK) to ensure it can continue to serve EU insurance business after Brexit.
Theresa May is expected trigger article 50 next week (or possibly the week after) and formally start the process of negotiating Britain's exit from the EU. This will take time and until the negotiations are complete there is nothing but uncertainty for business. Businesses have been scenario planning and some - especially in financial services - are now about to start executing these plans in order to ensure they continue to provide a seamless service to customers. Others will follow the lead of AIG and Lloyd's over the coming months.
AIG to set up new base in Luxembourg to service EU business