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BREXIT: Hiscox insurance to set up Luxembourg base

UK insurance company Hiscox plans to set up a new European subsidiary in Luxembourg in response to Brexit.11 May 2017

All of the firm's retail business in Europe will be written through this new EU subsidiary, Hiscox said in its first quarter statement

Hiscox's existing European business, which employs over 350 people across seven EU countries, will continue to operate without interruption, it said.

Staff for core functions such as compliance, risk and internal audit will be recruited in Luxembourg "to complement our existing structure", it said.

Establishing the new office will begin immediately, Hiscox said.

"Subject to regulatory approval, we expect to complete the restructuring well in advance of March 2019 in order to ensure a seamless transition for our customers, brokers and business partners," it said.

Luxembourg was chosen for "its pro-business position, strong financial services experience and well-respected regulator, [and proximity] to many of our major markets," Hiscox said.

The speed at which UK financial firms are making plans to move some staff or part of their operations to mainland Europe ahead of the UK's departure from the EU is increasing, according to analysis by EY

While the firms that have published details of their contingency plans remain in the minority, the number that have publicly voiced their intention to make staff or operational changes has increased by around 50% in the past four months, according to EY. Just under half of the 47 investment banks, 10 of the 37 insurers and 12 of the 52 asset management firms monitored by EY as part of its 'Brexit tracker' have now publicly announced their intentions to move some of their operations.

Standard Chartered said this month that it plans to turn an existing office in Frankfurt into a full EU subsidiary to give it access to the EU market after Brexit, while Lloyd's of London announced plans in March to set up a subsidiary in Brussels for the same reason.