Why do UK Insurance companies want to move to Ireland?
Two major marine insurance providers recently announced their plans to relocate their operations to Ireland from the UK. Both cited Brexit as the primary reason for their actions. The first provider to announce their plans was North and Sunderland Marine, followed two days later by Standard Club.
North and Sunderland Marine:
North of England P&I Association (North) and Sunderland Marine Insurance Company Limited merged to form the North Group in February 2014. The merger created one of the world’s largest global marine insurance operations, with a premium income of over US$500 million, free reserves of US$350 million and total assets of US$1,500 million. Last week it announced that it was relocating to Dublin, Ireland.
A statement on their website read; “Due to the ongoing uncertainty surrounding the future regulatory landscape, and a realistic prospect that passporting rights could be lost as early as 29 March 2019 on expiry of the current two year Article 50 notice period, it was agreed at a meeting of the North Board of Directors on 8 November 2017 that a subsidiary insurance company should be established in Ireland to underwrite all future EEA business of North and Sunderland Marine with effect from 20 February 2019.” Their key reasons for choosing Ireland are as follows:
- The regulatory, legal and taxation framework in Ireland is similar to the UK, where North is an experienced operator.
- A mature regulatory system with substantial experience in the supervision of Solvency II insurance companies.
- A strong talent pool within the financial services sector.
- Easy travel connections from Newcastle.
- The ability to conduct business in English.
The Standard Club is a specialist marine and energy insurer based in the UK. It’s a member of the International Group of Protection and Indemnity clubs, owned by its shipowner members, and controlled by a board of directors drawn from the membership. It has free reserves of US$390 million and a premium income of US$354 million. Last week it also announced that it was relocating to Dublin, Ireland. The possibility that Britain might lose access to the single market after Brexit was cited as the primary reason for their decision. Standard Club cited ‘similar tax, regulatory and legal regimes to the UK’ as a reason for choosing Ireland as a location.
Like so many other companies operating in the EU, the issue of ‘passporting’ is paramount. (‘Passporting’ is a process which allows a company registered in one EEA country to open in, or sell into, others without having to access additional authorisations) Given that over 40 percent of both North Group’s and Standard Club’s global business is based in Europe, it is essential that they maintain their access to the European market.
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