UK insurers have put on a brave face as Britain prepares to negotiate with the European Union over its divorce from the bloc.

The industry is confident it will continue to thrive and remain a global player, despite widespread concerns that the loss of EU membership following last week’s referendum will hobble London’s status as a leading insurance capital.

Losing the right to provide financial services throughout the EU – commonly known as passporting – will have industry-wide ramifications.

“The loss of these rights could see insurers forced to restructure and facing large operational, regulatory and tax costs as they adapt to such a change,” PricewaterhouseCoopers UK Insurance Leader Jonathan Howe said.

“Many non-UK insurance companies from areas such as the US and Asia currently use the UK as their European headquarters and as a ‘gateway’ into Europe through… passporting.

“There is a real risk these rights could be eliminated, and insurers will be thinking about the best location for their bases in the future.”

One example is US-based global insurer AIG, whose CEO Peter Hancock told a London seminar last month that the group would consider moving its European operations centre from London to somewhere in the EU if the vote went against remaining.

Munich Re has also warned the London market is likely to lose business to other international insurance hubs such as Singapore and New York.

Lloyd’s Chairman John Nelson told the market’s AGM last month that pro-exit politicians were “irresponsible to pretend that the benefits of a single market can be replicated outside of the EU”.

He said Lloyd’s would be a less appealing place for overseas investors to do business if the UK left.

He took a more positive line at the weekend, saying Lloyd’s has “a well-prepared contingency plan in place and will be fully equipped to operate in the new environment”.

“For the next two years our business is unchanged,” Mr Nelson said. “I am confident that Lloyd’s will stay at the centre of the global specialist insurance and reinsurance sector, and I look forward to continuing our valuable relationship with our European partners.”

But ratings agency Moody’s predicts uncertain times after the UK formally begins the departure process.

“The broader process may take longer as both sides seek to mitigate the impact of Brexit,” Moody’s said. “Banks and insurers are likely to see a more moderate credit impact from Brexit, given the domestic nature of their businesses and, in the case of insurers, the use of subsidiaries in continental Europe.”

Industry leaders say they want the impact on insurers during the transition to be minimal.

The Association of British Insurers says the focus should be on establishing the best post-EU set-up for the industry.

“For the UK Government, it will be important now to focus on ensuring the UK remains a globally competitive place to do business, with the best possible future trading network with the EU and the wider world,” Director-General Huw Evans said.

The British Insurance Brokers’ Association (BIBA) says the process of negotiating exit terms, setting out future arrangements with the EU and creating trading deals “is likely to take some considerable time and will impact our industry during that period”.

“BIBA will work with the Government and other authorities to ensure the interests of insurance brokers and their customers are fully represented in these vital negotiations.”

Lloyd’s Market Association (LMA) CEO David Gittings has expressed similar views.

“Lloyd’s underwriters have a well-earned reputation for being nimble and flexible in their business activities. They are well placed to steer a course through these uncertainties and take advantage of the resultant opportunities as they arise.”

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