LONDON (Reuters) - U.S. insurer AIG plans a European Union hub in Luxembourg following Britain’s decision to leave the bloc, the biggest financial services firm so far to detail such a move.
AIG said on Wednesday it would keep its main European headquarters in London and open a subsidiary in Luxembourg, which along with Frankfurt, Paris and Dublin is touting itself as an alternative base for firms wishing to retain access to the EU after Brexit.
“This ... ensures AIG is positioned for whatever form the UK’s exit from the EU ultimately takes,” Anthony Baldwin, Chief Executive of AIG Europe said in a statement.
Major banks have said they plan to set up EU subsidiaries to continue to be able to sell their services across the bloc, but few have announced concrete decisions.
British bank Lloyds has said it is likely to convert its Berlin branch into a subsidiary, and M&G, the fund arm of British insurer Prudential, is setting up a management company and distribution firm in Luxembourg.
AIG has previously said it was also looking at Dublin as a possible EU hub and insurer Hiscox has said it will choose between Luxembourg and Malta.
Lloyd’s of London, the world’s largest speciality insurance market, is due to pick a location for its EU subsidiary by the end of March, with Dublin and Luxembourg on its shortlist.
AIG chose Luxembourg for its proximity to the insurer’s European clients, position as a founding member of the EU, stable economy and expertise in financial services and “fintech”, an AIG spokeswoman said.
The switch would involve “changes at senior leadership level”, she added, without giving more details. AIG currently has a branch in Luxembourg with a staff of three.
Eighty-eight insurance companies and 216 reinsurance firms have a presence in Luxembourg, according to financial development agency Luxembourg for Finance.
“Over the coming months, we expect more companies to follow in the footsteps of both AIG and M&G, whether in the insurance sector, asset management, banking industry or in the fintech space,” Nicolas Mackel, CEO of Luxembourg for Finance said.
AIG said the proposed changes were expected to be completed in the first quarter of 2019, subject to regulatory approval.
Editing by Alexander Smith and Mark Potter