As the Brexit deadline approaches more and more companies are in the process off relocating to a European centre in order to be sure of access to the single market and the European passport when the UK departs. Luxembourg is proving to be especially attractive to non-life insurance companies. Delano asked Claude Wirion, managing director of the insurance regulator (CAA), what makes the grand duchy so attractive.
Let’s begin with a brief definition. Some common examples of non-life insurance, often called general insurance, include: car insurance; property insurance; health insurance; accident insurance; travel insurance; disaster insurance (fire, flood, earthquake, etc.); credit insurance and mortgage insurance.
At the beginning of May, the Luxembourg insurance regulator (CAA) announced positive results for Q1 2018 across all business lines and, specifically, that non-life had increased by a remarkable 45.71%,“mainly due to the first fallout from the approval of companies that chose Luxembourg as their base following the decision of the United Kingdom to leave the European Union,” according to a communiqué released at the time.
Claude Wirion told Delano that: “11 insurance companies have moved or are about to move to Luxembourg and there are more in the pipeline.” A fact that should see income in Luxembourg’s non-life business multiplied by three once all of these companies are operational.
As for why they chose Luxembourg, “The existence of a specialised supervisor just for insurance and reinsurance is appreciated. This means that our staff are experienced and can be proactive and speedy in processing applications,” said Wirion.
“There are also more general things about Luxembourg that make it attractive,” he added, “like the political and fiscal stability, a multilingual environment, digital connectivity, etc. These factors certainly play an important role too.”
However welcoming Luxembourg may be though, the newcomers will still have to accept that moving here is not just a change of address. “Building up the necessary substance in Luxembourg in order to comply with both regulatory and fiscal requirements is a challenge, and this in a context of an already stressed labour market where it can be difficult to find people with the necessary skills,” said Wirion.
“Even if the CAA tries not to impose a sudden change in existing and well-functioning processes on the new companies, we still make is clear that we expect that they will be adapted to the new legal setup over time,” he added.