Lloyd’s Fears ​‘Brexit’ Impact on Insurance & Financial Markets

There are fears that the imminent ‘Brexit’ referendum, now set for June 2016, could have huge impacts on both the financial and insurance markets. Both European and British re/insurance groups have expressed concerns about the effect such a move would have on their respective financial and currency markets and how any alterations to regulations could affect their trading.

Lloyd’s has released a message to the market from John Nelson, Chairman, stating that an exit from the EU would damage London’s insurance market and its status, and that the Council of Lloyd’s has “unanimously concluded that the best outcome is for the UK to remain a member of the EU”.

The EU is valuable to the Lloyd’s market as it provides trading rights with the other 27 member countries. It also allows Lloyd’s to benefit from the many trade agreements with other countries that are facilitated by membership to the EU.

In the message, Nelson confirms that Lloyd’s are developing contingency plans to ensure the market will still have access to European markets in case the referendum determines the UK’s departure from the EU. He adds that the EU is currently a “significant attraction for direct investment into the UK – and indeed in to Lloyd’s” and that the UK’s continued membership to the EU “will be a crucial element in London being able to retain and reinforce its pre-eminent status as the global hub for insurance and re-insurance.”

Read John Nelson’s full message here.

You can also read the speech given on the matter by Lloyd’s Chief Risk Officer, Sean McGovern, here.

The referendum on the UK exit from the EU is scheduled to be held on Thursday 23rd June 2016.