AIG joins list of finance companies looking to move from Britain

US insurer AIG may move its European headquarters from London to another European Union country because of Britain’s vote to leave the EU, the head of the AIG’s European and UK operations said at an industry conference this week.

AIG joins a growing list of finance industry companies that have said they may have to shift operations to continental Europe to maintain links to customers after Brexit.
Speaking at the same conference, Trade Minister Mark Garnier said the government was listening to the financial industry’s concerns over Brexit. 
“We will aim to limit uncertainty surrounding business,” Garnier said.
“The government fully understands the implications of Brexit for the financial services industry,” Garnier told insurance trade body ABI’s annual conference.
Banks, insurers and asset managers in Britain fear losing access to the EU’s single market, and a damaging “cliff edge” effect of leaving the bloc if there are no transitional arrangements ahead of any new trading terms agreed with the EU.
Anthony Baldwin, CEO of AIG’s European and UK arms, said the group might decide in the coming year to move its European head office from London to an EU country after Brexit, though it would still maintain a big London hub. AIG has around 2,500 staff in Britain.
Baldwin told reporters on the sidelines of the conference he was looking at half a dozen locations, including Dublin, though the impact on staffing would not be material if the headquarters moved out of London.
“At a certain point in time you have to pull the trigger in the absence of any clarity on where negotiations are going with the transition period,” Baldwin told the conference.
“We will always continue to have a big London hub but we might have a European headquarters elsewhere,” he said.
The Lloyd’s of London insurance market, underwriters Hiscox and Beazley, and motor insurer Admiral have also said they might shift operations from London to centers like Dublin.
Huw Evans, director general of the ABI, said the insurance industry should not moan about the Brexit vote, but instead engage with politicians to find a way forward and minimize risks to the sector.
British Prime Minister Theresa May has said she will start formal divorce talks with the EU by the end of March.
“That timetable has not changed,” Garnier said.
An industry survey earlier showed that British manufacturers reported their healthiest order books in November since before the Brexit vote and they are their most confident about the near-term outlook in nearly two years.
But the Confederation of British Industry also said manufacturers intend to raise prices at the fastest pace in almost three years, reflecting the sharp fall in the value of the pound since voters decided to leave the European Union in June.
The CBI said its monthly industrial orders balance improved to -3 in November, its highest level since June, and up sharply from -17 in October. Economists polled by Reuters had expected a more modest improvement to -9.
The CBI’s reading of export orders fell to -11 from -6, but expectations for output in the next three months jumped to +24 from +13 in October.
“It’s good to see manufacturers’ overall order books at healthy levels, and the outlook for output growth remaining robust as we head into Christmas,” CBI chief economist Rain Newton-Smith said.
“But the weak pound is beginning to make its mark, and prices are expected to rise, especially in the food and drink sector. On the flip side though, export orders remain above average,” she said in a statement.
Newton-Smith called on British finance minister Philip Hammond to show a “crystal clear focus” on infrastructure, investment and innovation when he announces the government’s first budget plans since the Brexit vote on Wednesday.
So far, Britain’s economy has fared better since the Brexit vote than almost all forecasts.
The Bank of England earlier this month scrapped its plan to cut interest rates below their already record low level and said it was adopting a neutral stance on monetary policy, partly due to the expected rise in consumer prices next year.
The monthly survey of 430 manufacturers was conducted between Oct. 26 and Nov. 11.

Source: Arab News