Lloyd’s of London plans to open Brussels office by middle of 2018

Lloyd’s of London aims to have a new Brussels office up and running by the middle of next year, after the insurance market failed in its efforts to secure “passporting” rights for financial companies to conduct business across the EU after Brexit.

The world’s biggest insurance market confirmed on Thursday it would set up a subsidiary in the Belgian capital, which would allow it to continue underwriting insurance policies from all 27 EU and three EEA states after the UK leaves the union.

Lloyd’s has been lobbying the UK government to guarantee passporting rights, which allow UK banks and insurers to do business in the rest of the EU, but felt that “the chances are lower than they were” and decided it could wait no longer.

Inga Beale, the Lloyd’s chief executive, said this would ensure that business can carry on without interruption when the UK leaves the EU. The move, which was announced alongside the group’s annual results, came a day after Theresa May triggered article 50 to kickstart the two-year process of leaving the EU.

Beale said Lloyd’s had plumped for Brussels because of its “really robust reputation for regulation”, access to multilingual talent and the ease of travelling there from London. Another factor was the likelihood Belgium will remain in the EU – which was one of the factors that counted against Paris, she said.

The new subsidiary will have its own board and employ about 60 staff initially, including people already working in Germany and Italy. About 10 to 20 staff will be based in Brussels at the start, including the chief executive of the new business. Beale said the “odd job” might move from London – for example, people who have European roles.

Beale explained that because it took time to set up a new company and many commercial insurance policies were renewed at the start of January, Lloyd’s had to act now to ensure its Brussels subsidiary was up and running by the middle of next year. But if passporting rights were guaranteed, “we would not require an EU subsidiary”, she said. It would also benefit EU firms doing business in Britain.

She warned that though the UK was expected to leave the EU in two years, there would be “years and years of negotiations and planning to do”.

Lloyd’s employs about 700 people in London out of global workforce of 1,000.

Beale said Lloyd’s had picked Brussels out of a long list of options that included Dublin and Malta, and stressed that it was “not a simple decision”. The Belgian capital trumped Luxembourg, where a number of global insurers have a presence, because Brussels has a bigger domestic insurance market, among other things. But she did not expect Brussels to become a specialist centre for insurance – London will retain that crown.

Special tax deals did not play a role in the insurance market’s decision, she added, saying: “Tax wasn’t one of the key factors.”

At Lloyd’s, 11% of premiums are with EU clients, but only half of that – about £1.5bn – is at risk from Brexit. Only simple insurance products will be affected, but not big reinsurance contracts and specialist insurance such as marine and aviation, Beale said.

Other UK insurers are preparing to shift operations to continental Europe. “Some will go to Dublin and Luxembourg, some may even go to Malta,” Beale said.

Royal London Mutual Insurance Society will turn its Irish business into a regulated subsidiary so it can continue to sell products across Europe after the UK loses access to the single market, its chief executive, Phil Loney, said on Thursday.

AIG, the US insurance company, announced this month that it would set up a subsidiary in Luxembourg, where it currently has a branch. Goldman Sachs is to move move hundreds of bankers to Frankfurt and Paris, while HSBC wants to switch 1,000 investment banking jobs from London to the French capital.

Beale stressed it was crucial for the UK and the EU to “negotiate an agreement that allows business to continue to flow under the best possible conditions once the UK formally leaves the EU”.

Lloyd’s reported a £2.1bn pre-tax profit for 2016, the same as in 2015. It had £2.1bn of major claims, the fifth-highest since the turn of the century, mainly because of Hurricane Matthew, which hit the Caribbean and the east coast of the US, and the Fort McMurray wildfire in Canada.

A lower underwriting result was offset by significantly improved investment returns, driven by a downward yield shift in bond markets, and foreign exchange gains, mainly caused by the pound’s slide since the Brexit vote.



California’s Jones Tells Oklahoma’s AG, Insurance Commissioner and Others He Stands by Climate Initiative

Responding to top government officials in oil, gas and coal producing states that threatened to sue over his state’s climate initiatives, California Insurance Commissioner Dave Jones has pretty much said: bring it on.

In June, Oklahoma Attorney General Mike Hunter sent a letter to California’s insurance commissioner threatening legal action if that state continues with its policy of requiring insurance companies to publicly disclose investments in fossil fuels. The letter was signed by AGs from 11 states and one governor.

Oklahoma Insurance Commissioner John Doak followed up with his own letter to Jones urging him to back off his Climate Risk Carbon Initiative, which calls for insurance company disclosure of investments in fossil fuel producing companies and aims to discourage them from such investments. As part of the climate initiative, Jones has asked insurers operating in his state to pledge they’ll refrain from investing from the coal industry.

Doak told Jones in his letter dated June 20, that he and several other state insurance commissioners have “grave concerns” over the California commissioner’s fossil fuel policy and called the Climate Risk Carbon Initiative an “affront to sound insurance regulation.” Doak’s letter was signed by insurance commissioners in Indiana, Kentucky, Montana and North Dakota.

However, in letters to the opposing AGs and insurance commissioners dated July 27, Jones told his “red state” detractors that he is “not deterred by your threats. We will not stop asking insurance companies to consider climate related risks and in particular we will not stop our Climate Risk Carbon Initiative.”

Jones has taken on climate change as one of his primary causes. He has said that insurers could have stranded assets on their books if investments in coal and other fossil fuels tank as green energy continues to become more affordable and regulations make fossil fuel-based investments an even worse bet. He pointed out that the G-20 Financial Stability Board, the Bank of England, global insurance regulators and others have warned of the risk that the value of fossil fuel investments may decline due to government actions and market forces.

He told the opposing officials that while “it is politically popular in your states to deny or ignore climate change, ignoring the potential financial risks to insurer investments from climate change is irresponsible and even reckless.”


Carrie Fisher: Disney to receive huge insurance payout due to actress’s unexpected death

Disney is expected to be awarded one of the largest insurance payouts in history after reports it took out a $41m (£33.4m) policy on Carrie Fisher.

The company, which bought Lucasfilm in 2012, took out a policy with Lloyds of London to protect it from any losses if the actress was unable to fulfil her contract to appear in the new Star Warstrilogy, the trade magazine Insurance Insider reported.

The 60-year-old, who renewed her role as Princess Leia — known as General Organa in the 2015 film The Force Awakens — died in hospital four days after suffering a heart attack on a flight from London to Los Angeles.

Fisher had already completed filming for the second of the new movies, known as Episode VIII and due to be released in December 2017, but fans had expected her to appear in the third movie, which has not yet begun filming.

Insurance contracts covering major film companies for the unexpected death or incapacity of stars are not unusual in the movie industry.

It is currently unclear how Disney will respond to Fisher’s death — she was slated to have a major role in Episode IX — and they could use a CGI recreation of her as they did in the Star Wars spin-off Rogue One which was released in December.

Star Wars is not the first Hollywood movie franchise to be threatened by the unexpected death of a star.

The final instalment of The Hunger Games series lost one of its stars, Philip Seymour Hoffman, in 2014 but was able to release its final movie, Mockingjay Pt 2, as he had filmed most of his scenes prior to his death.

The film rewrote one key scene towards the end of the movie and featured a CGI version of Hoffman in scenes where he had no dialogue.



Majority of Americans want Congress to move on from health-care reform: Reuters/Ipsos poll

A majority of Americans are ready to move on from health-care reform at this point after the U.S. Senate’s effort to dismantle Obamacare failed on Friday, according to an exclusive Reuters/Ipsos opinion poll released on Saturday.

Nearly two-thirds of the country wants to either keep or modify the Affordable Care Act, popularly known as Obamacare, and a majority of Americans want Congress to turn its attention to other priorities, the survey found.

Republicans have vowed to dismantle the Affordable Care Act since Democratic President Barack Obama signed it into law in 2010, and it appeared they finally had their chance when Republican President Donald Trump took office in January. But the law, which helped 20 million people obtain health insurance, has steadily grown more popular.

The July 28-29 poll of more than 1,130 Americans, conducted after the Republican-led effort collapsed in the Senate, found that 64 percent said they wanted to keep Obamacare, either “entirely as is” or after fixing “problem areas.” That is up from 54 percent in January.

The survey found that support for the law still runs along party lines, with nine out of 10 Democrats and just three out of 10 Republicans saying they wanted to keep or modify Obamacare.

Among Republicans, three-fourths said they would like their party’s leaders to try to repeal and replace Obamacare at some point, though most listed other issues that they would give a higher priority right now.

Disappointment among Republicans and happiness among Democrats about the repeal’s failure were palpable. Two-thirds of Republicans felt “bad” that the Senate failed to pass a health-care bill, while three-fourths of Democrats felt “good,” according to the Reuters/Ipsos poll.

When asked what they think Congress should do next, most Americans picked other priorities such as tax reform, foreign relations and infrastructure. Only 29 percent said they wanted Republicans in Congress to “continue working on a new health-care bill.”

Gene Anderson, 81, a Trump voter living in a retirement community in Zionsville, Indiana, said the president should “refocus on some stability in his administration and some demonstration of being able to work together with Democrats in Congress.”

“I don’t understand why they had to push for health-care reform before tax reform,” he said. “They ought to sit down and come up with a viable legislative, doable tax reform.”

Americans appear to be more supportive of some of the main features of Obamacare. For example, 77 percent said they were in favor of expanding Medicaid to low-income families, and 43 percent said they favored requiring U.S. residents to own health insurance. That was up from 66 percent and 36 percent, respectively, when Reuters/Ipsos first asked those questions in April 2012.

The latest Republican effort failed when Senator John McCain split from his party’s leadership and joined Republican colleagues Susan Collinsand Lisa Murkowski and Senate Democrats to vote against a so-called skinny repeal eliminating certain aspects of Obamacare. McCain later said the measure “offered no replacement to actually reform our health-care system.”

Respondents said they thought a lot of people shared responsibility for the failure on health care. When asked who “is most responsible,” 20 percent picked Senate Republicans, 13 percent said Trump, and 11 percent said McCain. The rest picked Senate Democrats and Majority Leader Mitch McConnell, as well as Senators Collins and Murkowski.

The Reuters/Ipsos poll was conducted online in English throughout the United States. It gathered responses from 1,136 people, including 381 Republicans and 475 Democrats. The poll has a credibility interval, a measure of accuracy, of 3 percentage points.





Cancer patients paying four times too much for insurance as comparison sites exclude best deals

People with long term illnesses are paying up to four times as much for insurance if they use price comparison websites, regulators have warned.

In a paper published yesterday the Financial Conduct Authority warned that up to 15 million people currently living with at least one long-term health condition may be struggling to find the best deals.

In one case a woman with cancer travelling to Dubai found the best deal she could find on comparison sites cost £2,800. She was considering travelling without cover until a friend recommended a specialist who offered cover at £800.

Long-term medical conditions can have a large impact on people’s finances and the way consumers are viewed by insurers in terms of risk.

Some 3 million consumers with particular characteristics, such as a disability or long-term illness, may find themselves classified as “non-standard risk” for the purposes of insurance.

Cancer patients are among those being quoted over the odds on comparison sites  CREDIT: PHANIE / ALAMY STOCK PHOTO





The number of consumers who may find themselves in such categories is potentially large, including for example the 3 million people with disabilities who have been turned down or charged extra for insurance and the 2.5 million people living with or after cancer.

But as the algorithms used by many popular comparison sites to sell people insurance deals do not cover “non standard risk” policies, they are not included in searches.

A spokesman at the Association of British Insurers, which represents insurance firms, said:  “Travel insurance is widely available for people who have long-term and serious health conditions, including people who have cancer. For customers that are struggling to find cover, we would advise approaching a specialist provider, who should be able to offer insurance based on their particular circumstances, including what type of illness they have.

“Insurers are always striving to find new ways to develop products that are affordable and accessible; regardless of circumstances. Travel insurers support and help thousands of travellers and their families should the worst happen, paying nearly 9 in 10 claims in 2016. We look forward to engaging with the FCA on this issue going forward.”