British ship insurer Standard Club is setting up a new European Union subsidiary in Dublin in case Britain loses access to the single market after Brexit, becoming the second of these specialised providers to opt for Ireland in two days.
North P&I Club, another UK regulated ship insurer, has also chosen the Irish capital for its EU subsidiary, it said on Monday.
Britain dominates the global marine insurance market and losing access to specialist Protection and Indemnity (P&I) clubs such as Standard and North could weaken other parts of the country’s multi-billion pound shipping services sector.
“We have concluded that Dublin offers the best location to serve European members post-Brexit,” Standard Club’s chief executive Jeremy Grose said in a statement on Tuesday.
Insurers are making contingency plans after Britain’s vote to leave the EU means they risk losing “passporting” rights that allow UK financial services firms to trade in Europe without the need for locally regulated entities.
“The tax, regulatory and legal regimes are similar to the UK, which means that the transition will be easier to manage than some of the other competing locations,” Standard Club’s Grose said.
“We will seek regulatory approval and progress our plans to establish a presence in Dublin during 2018.”
Europe represents over 40 percent of both North and Standard Club’s global business, data from the companies showed.
A North spokesman said on Monday that it had 371 staff globally and the initial headcount could be around six or seven, subject to change.
There are 13 major global P&I clubs, of which six are regulated in Britain and are estimated to account for over half the total market share of an industry that insures about 90 percent of the world’s ocean-going tonnage.
Earlier this year, shipping and insurance sources said other P&I clubs were exploring locations including Luxembourg and Cyprus.
Of the remaining four P&I insurers, UK P&I Club, Britannia and London did not immediately respond with any comment on Tuesday, while Steamship declined to comment at this stage over potential plans.
UK P&I Club said last month it planned to announce its Brexit plans for an EU subsidiary by the end of 2017.
Many of these clubs – owned by shipping companies – have been an integral part of the City of London for nearly two centuries, insuring ocean going ships against pollution and injury claims, typically the biggest costs when a vessel sinks.
Hull and machinery cover, which protects vessels against physical damage, is provided separately by other marine insurers.
Dublin has emerged as the EU location for a number of players in the wider insurance market including specialist insurance groups Chaucer, part of Hanover Insurance Group , and Beazley.
Source: ReutersPrevious Next
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