Brexit has taken chunk out of London commercial insurance, says IUA

FILE PHOTO: A man records an image of a recently painted mural of a person sitting with both the British and EU flag, in Greenwich, London, Britain, October 6, 2020. REUTERS/Toby Melville/File Photo

LONDON (Reuters) - Britain’s departure from the European Union may have cut business in the London commercial insurance market by 14% last year, the International Underwriting Association said on Wednesday.

Gross premium income for the so-called London company market - commercial insurance excluding Lloyd’s of London - totalled 27.6 billion pounds last year, the IUA said in a report.

Without Brexit the figure is likely to have been in excess of 32 billion pounds because about 4.5 billion pounds of premiums previously recorded in London were recorded in Europe, the IUA said.

Britain left the EU at the end of January and UK-based insurers have been moving business to new or expanded hubs in the bloc because they will not be able to conduct EU business from Britain once the Brexit transition period expires at the end of this year.

However, the IUA added that there had been growth in premiums from other regions, leading to a relatively modest 3% drop in overall premiums compared with 2018.

The IUA cited growth in energy, aviation, property and professional liability cover.

A crackdown by Lloyd’s of London on poorly-performing business lines has driven more insurers to the rival London company market, industry sources say.

Reporting by Carolyn Cohn; Editing by David Goodman