London-based international specialist insurer Hiscox will establish a new European subsidiary in Luxembourg in response to Brexit.

It says all retail business in Europe will be written through the new subsidiary.

“Our existing European business, which comprises more than 350 people across seven of the EU 27 countries, will continue to operate without interruption,” it says in an interim management statement.

Hiscox recorded first-quarter gross written premium of £752.1 million ($1.32 billion), up 17.3% on the corresponding period last year.

Group CEO Bronek Masojada says the strong start to the year was due to long-term investment in Hiscox Retail, particularly in the small business sector.

Hiscox says there has been no improvement in rates this year for “big-ticket” business.

“A continuation of a lack of major loss events, excess capital and strong competition continues to put pressure on rates,” it said. “This is most severe in the London market, where we are seeing double-digit declines in the marine, energy and US large property accounts. However, rates remain under pressure in almost all lines.”