AIG selects Luxembourg for EU unit and reveals post-Brexit plan

American International Group (AIG) has announced its plan to locate an insurance company in Luxembourg to write business across the European Economic Area (EEA) and Switzerland once the UK leaves the European Union.

The proposed reorganisation is expected to be completed in the first quarter of 2019. The UK may lose its passporting rights after leaving the EU. The mechanism provides a company authorised in one member state the ability to conduct cross-border business without being required to apply for any additional authorisation or hold assets locally. Official Brexit negotiations with the EU are expected to start in 2017.

US-based AIG currently writes business in Europe from a single insurance company based in the UK, which has branches across the EEA and Switzerland.

The group said that it will have two subsidiary companies from 2019, one in the UK to write UK business and the other in Luxembourg to write EEA and Swiss business.

It added that AIG will continue to support its European operations from the UK, which is a core market where it will continue to invest and grow.

Anthony Baldwin, CEO of AIG Europe, said: "This is a decisive move that ensures AIG is positioned for whatever form the UK’s exit from the EU ultimately takes. AIG sees opportunity in the ongoing resilience of the UK insurance market.

"At the same time, we are ensuring that our clients and partners experience no disruption from the UK’s EU exit. Our Luxembourg company will be complementary to our existing structure and will be part of our single European module."

"Luxembourg, a founding member of the European Union, offers us a secure location in a stable economy with an experienced and well-respected regulator in continental Europe close to many of our major markets."

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