Lloyd's of London underwriter Hiscox Ltd was in talks with regulators in Luxemborg and Malta over setting up a new insurance base in one of the countries to service European Union clients after Britain leaves the bloc, its chairman said.
Hiscox, which underwrites a range of risks from oil refineries to kidnappings, said it expected to begin the process of incorporating the legal entity in the first half of 2017, so that it could write new business using the new base before the end of 2018.
"Looking from our business point of view at the moment, those two locations look to be the best," non-executive chairman Robert Childs told Reuters, adding that the London market was navigating its way through a challenging trading environment.
Many London-listed insurers are drawing up plans to move some business to Europe if they lose their right to sell their products across the bloc due to Brexit.
Industry sources involved say many UK-regulated ship insurers are considering jurisdictions such as Luxembourg and Cyprus, while some other insurers have indicated that Dublin may be a favoured pick.
Hiscox said an EU base would help it grow and expand its European business, which employs 300 people, underwrites $217 million in premiums and has a combined ratio of 86.3 percent.
The Bermuda-based company reported a 24 per cent rise in group gross premiums for the year ended December 31, while net premiums rose 17 per cent.
Childs declined to specify whether the move to underwrite EU business from Luxemborg or Malta had altered recruiting plans for the company which employs over 2,000 people.
"We are recruiting as necessary wherever we need to," he said, adding that the company was focused on growing its retail lines business, where it still had a relatively small share of the market in Europe, the UK and the United States.
Hiscox has focused on growing the retail lines business, which underwrites fine art and ransom to property and media, as big-ticket insurance businesses face rate pressure due to stiffer competition for larger premiums.