© RTL (archive)
Several insurance companies are relocating their headquarters from London to the Grand Duchy in order to still be in the European Union after Brexit.
Luxembourg's Insurance Commission (CAA) presented its 2018 report on Monday evening. The reports reveals that Luxembourg's economy will profit from Brexit. The CAA approved the relocation of a large number of companies active in the direct insurance sector.
CAA director Claude Wirion explained that 12 companies received an agreement in 2018 and another three early 2019. Such figures are a first for the CAA.
Early 2019: three new insurance and seven brokerage companies
11 out of the 15 companies are relocating only because of Brexit. Similarly, brokerage companies are also undergoing an exodus towards Luxembourg as of 2019 - seven such companies received approval in the first semester of the year.
Consequently, the number of employees in the sector is experiencing a proportional increase, having grown by 21% between 2016 and 2018. The largest employee increase comes from the foreign branches of Luxembourg businesses, which have seen personnel increases of 45%. Wirion added that this figure is equally likely to rise as a result of Brexit.
As for the businesses which have moved their headquarters to the Grand Duchy, nearly all of these have pre-existing branches in European Union countries. These EU branches will no longer be linked to their London headquarters, instead moving over to the new Luxembourgish headquarters.
Results down 16%
Whilst receipts for premiums rose by 3% in the last year, results after tax have seen a 16% drop compared to 2017. Wirion specified that life insurance registrations have seen a 30% drop.
However, it should be noted that generally 2017 was considered an exceptionally good year for the industry, which has not been reflected in the following year.
In terms of the life insurance industry, Wirion added that a new business is currently undergoing a rapid extension abroad, which causes starting deficits. The business's deficit reflects its size, as the firm is a rather big one. Consequently, the deficits have had a negative effect on last year's results.
However, the CAA is not especially preoccupied by the issue, looking at long-term figures instead. Nevertheless, figures experienced a steady increase in 2019's first quarter.