BRITISH ship insurer North Protection and Indemnity (P&I) Club says it's preparing for post-Brexit fallout by setting up a new European Union (EU) subsidiary in Dublin.
North P&I Club, along with its subsidiary Sunderland Marine and the vast majority of UK and EU businesses, fear that Britain may lose access to the EU single market after Brexit. As a result, insurers are making contingency plans as a messy fall-out could mean losing "passporting rights" that allow UK financial service firms to trade in Europe without the need for locally regulated entities.
North P&I Club is the first insurance provider to announce its location for an EU subsidiary and it is expected to start implementing its contingency plans in the first quarter of 2018, American Shipper reported quoting Reuters.
The firm said that due to "regulatory uncertainty and a realistic prospect", passporting rights could be lost as early as March 2019 upon the current two-year Article 50 expiration. Therefore, its board agreed that a subsidiary insurance company should be established in Ireland to underwrite all future business in the European Economic Area for North and its separate unit Sunderland Marine commencing February 20, 2019, said Reuters.
"The decision to locate the subsidiary in Ireland follows an extensive horizon scanning exercise during which a number of possible locations were considered," said North P&I Club.
The firm cited the regulatory, legal and taxation framework, a mature regulatory system, a strong talent pool, easy travel connections and lack of language barriers as the motivation for their choice of Dublin. Over 40 per cent of the company's global business is located in Europe, said Reuters, and Dublin is favoured by many specialised companies as an alternative base to London due to low corporate taxes.
