Lloyds of London has ruled out Malta as the location for a subsidiary outside the UK, in spite of the fact that Malta had a “unique cell structure” which looked very promising, according to the insurance company’s CEO.
Inga Beale, Lloyd’s chief executive officer, was interviewed by Bloomberg’s Erik Schatzker at the World Economic Forum in Davos, Switzerland, and confirmed that Malta caught their attention thanks to the so-called protected cell company structure in the island’s legislation.
“Malta had a unique cell structure that was available, and because we are a market, it looked like it was going to work for us,” she said.
It looked like it was going to work for us. But we have now decided Malta is just not going to be the right location
“But we have now decided it is just not going to be the right location. We are such a global business that we just felt that it was wrong. So it is more likely to be somewhere on the continent.”
Malta was not originally in contention for the prestigious subsidiary and was only added to the list a few weeks ago.
Lloyds then sent a delegation to Malta. This newspaper reported recently that Malta was in pole position, but sources immediately warned that this announcement would not go unnoticed by its rivals.
Ms Beale told Bloomberg that she had had talks with many “world leaders” while in Davos, and that there were a “lot of factors to consider”.
Lloyds made it clear some months ago that it wanted to open an office in another EU member state as soon as British Prime Minister Theresa May set Article 50 in motion to negotiate Brexit – meant to be by the end of March.
Lloyds intends to keep its 328-year-old base in London, but it will most likely move its top management to the new subsidiary, which will have to be capitalised separately, running into tens of millions. The other – clearly more costly – option would be to have a branch in each of the member states, believed to have been all but ruled out.
The issue is passporting – which means having the ability to conduct business from one jurisdiction in all the other member states.Ms Beale said that Lloyds would lose about £800 million in premiums if it lost these passporting rights, around four per cent of its total.