Since the 2016 Brexit referendum, we have worked tirelessly to ensure that the market’s insurance and reinsurance customers can continue to access Lloyd’s specialist policies and strong financial security regardless of the ongoing political Brexit negotiations. In November 2018 we launched Lloyd’s Brussels, a fully authorised Solvency II insurer with approval to write business from the European Economic Area. In addition, we have worked closely with the industry and with our partners to reassure them of their ability to work with Lloyd’s post Brexit. This work will continue until the political negotiations conclude. Finally, we have undertaken a vast amount of work to ensure we are ready for any eventuality arising from Brexit, including a no-deal scenario. Importantly, through Lloyd’s Brussels, we will continue to underwrite business across the EU.
We are confident of our readiness: Lloyd’s Brussels has been writing business since January 2019 and is ready to write reinsurance in the event the UK leaves the EU. We are transferring our current book of EEA business to Lloyd’s Brussels, with the transfer finalised in October 2020. And we have been clear that whatever the scenario, our underwriters will continue to honour all contractual commitments on existing Lloyd’s policies, including on the payment of valid claims. Our model has been recognised by regulators and credit agencies across Europe, and we have confirmation that Lloyd’s credit ratings will continue to be recognised for regulatory purposes within the EU. This will ensure that EU cedants can continue to include reinsurance cessions to Lloyd’s in London in their solvency calculations, even if the UK leaves the EU on the 31st of October without a deal and without reinsurance equivalence.
All the necessary conditions for endorsement have been put in place, with EU credit reference agencies like Standard & Poor’s, A.M. Best and Moody’s pledging to endorse our ratings as soon as the UK leaves the EU. This means that the ratings of Lloyd’s of London will continue to be recognised for solvency purposes in the EU under Solvency II, as they are at present. The continued recognition of Lloyd’s ratings means that cedants which have purchased reinsurance from the Lloyd’s market in London in the past do not have to amend their solvency capital requirement calculations or their calculations of technical provisions. In addition, in the event of a hard Brexit without reinsurance equivalence…