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Lloyd's insurer may establish E.U. arm to weather Brexit

Lloyd's insurer may establish E.U. arm to weather Brexit

Reuters — Lloyd's of London underwriter Hiscox Ltd. said it would consider setting up an E.U.-based insurance company to weather the possible effect of Britain's decision to leave the European Union, sending its shares to an all-time high.

The insurer's shares rose as much as 2.6% on Monday.

Hiscox will decide by the end of the first quarter next year on whether it would set up the company, Chief Executive Bronek Masojada said on a post-earnings call.

Mr. Masojada said the company was considering ten countries where it could set up the E.U.-based insurance firm.

Insurers have been keen to reassure clients about their plans in case they should lose access to the E.U. following Britain's shock vote to leave the European Union on June 23.

The vote raised the risk that British insurers could lose "passporting" rights that enable them to sell their products throughout Europe.

Lloyd's of London's Beazley P.L.C. said on Friday it was working to get European insurance licenses for its Irish reinsurance business to allow it to operate throughout the E.U., even if Lloyd's loses access to the bloc.

Mr. Masojada, who has been with Hiscox for 23 years, said the management did not feel the need to take a decision on the new arm immediately.

The company generates about 20% of its total gross written premiums from the European Union.

Hiscox reported a 52% jump in pretax profit for the first half of the year on Monday.

Nearly half of its gross written premiums comes from the company's retail business that offers specialty insurance policies for small businesses and home owners.

For the first half of the year, gross written premiums from the U.S. retail business grew 32.8%, becoming the biggest contributor to Hiscox's pretax profit.

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