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Brexit would damage London’s status as insurance capital: Munich Re

Munich Re has warned that Britain’s exit from the European Union – “Brexit” – would result in London losing some of its clout as one of the world’s leading insurance hubs.

Britons will vote on June 23 to decide whether the UK leaves or remains in the EU. A number of senior figures in the UK insurance market have spoken forcefully about the negative impact an exit would have on the London market.

Carsten Prussog, head of the divisional unit at Munich Re responsible for the UK, says the Brexit debate is “of course closely monitored” by Munich Re.

“If the UK votes in favour of Brexit, the economy and capital markets both in the UK and the rest of Europe would initially see the impact from increased economic and political uncertainty,” Dr Prussog said.

“The long-term effects would very much depend on any renegotiation of the relationships between the UK and the EU, and the UK and its non-EU trade partners.”

Dr Prussog says the economic and political fallout of Brexit on growth and the capital markets would affect “all insurers in the UK”.

“London is currently one of the most important global insurance hubs. If Brexit were to come about, London would presumably suffer a loss of significance for the insurance industry,” he said.

“I would expect some insurance business to move from the London market to the EU, partly also to other international insurance hubs such as Singapore or New York. This would not be good news for the UK or for Europe.”

Dr Prussog says Munich Re will remain “rather flexible” about its business out of London in the event of a vote to leave the EU.

“My concerns are that Brexit would hurt both the UK economy and its people, so I hope that the British people will vote to stay in the EU,” he said.