20 January 2017

Lloyd's chief rules out Malta for EU subsidiary

Lloyd's chief executive Inga Beale has said Malta will not be the location of Lloyd's EU subsidiary.

Speaking to Bloomberg at the World Economic Forum in Davos this morning (20 January), she said that Malta had originally seemed like a leading contender, but after greater consideration was no longer in the running.

Lloyd's is relocating its EU business from London in order to retain passporting rights with the single market.  

Malta's cell structure for insurance business had originally attracted Lloyd's to the country, Beale said. This structure allows firms to register as Protected Cell Companies (PCCs) which includes the benefit that each cell is only obliged to hold capital needed to protect its risks, while the own funds requirements applies to the PCC as a whole.

"Because we're a market, it looked as though that was going to work for us," she said. "But now we've decided it's just not going to be the right location. We're such a global business that it just felt that was wrong and [the subsidiary] is likely to be somewhere on the continent."

Lloyd's has previously said it is considering five potential cities for relocating EU business, including Dublin.

On 17 January Lloyd's chairman John Nelson told Reuters that Lloyd's will be ready to announce which country it has chosen to set up a subsidiary in by the middle of April at the latest. The interview took place just before Theresa May's speech that announced the UK will not be seeking to remain a member of the single market.

In Davos Beale praised the prime minister's speech for making it clearer what the government's position is on the single market, but said this meant Lloyd's "will have to go ahead with contingency plans" to set up an EU subsidiary "hopefully by the end of the first quarter".