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Brexit prompts insurer Hiscox to set up new subsidiary in Luxembourg

Insurer Hiscox is to set up a new EU subsidiary in Luxembourg as a result of Brexit.

The firm, which employs 1,200 people in the UK, said that all Hiscox retail business in Europe will be written through the new subsidiary, with a new team covering compliance, risk and internal audit to be recruited.

It is understood that the Luxembourg operation will staff 10 people initially, with no jobs transferred from London to the duchy.

Hiscox said that Luxembourg was selected because of its "pro-business position, strong financial services experience and well-respected regulator", as well as its proximity to the insurer's major markets.

The process of establishing the new unit will begin immediately, the firm said, with completion expected in advance of March 2019 in order to "ensure a seamless transition for our customers, brokers and business partners".

It is the latest in a series of announcements from City-based firms which have said they are shifting jobs to the continent as Britain leaves the EU.

Last week JP Morgan said it is planning to move up to 1,000 London jobs to Dublin, Frankfurt and Luxembourg in a bid to secure its EU business after Brexit.

HSBC plans to move 1,000 staff to France, AIG is set to shift a string of executives to Luxembourg and Lloyd's of London has opted for a subsidiary in Brussels.

Prior to last year's referendum Robert Hiscox, who chaired the insurer for 43 years until 2013, accused David Cameron's government of disseminating pro-EU "illegal propaganda".

Mr Hiscox, who is still honorary president at the eponymous insurer, told the Press Association City institutions supporting Britain remaining in the EU formed part of an "elite" that are acting in their own self interests.

He said last year: "All the experts coming out for Remain are all part of the elite, from Goldman Sachs downwards, they've all bought into it, it's for their own self-interest.

"Why do we want to have millions of rules delivered by an unelected tyrannical elite in Brussels?"

Mr Hiscox added at the time the insurance company, currently head-quartered in Bermuda for "tax and regulatory purposes", may move its base back to the UK if Britain voted to leave.

The company made the Luxembourg announcement alongside first quarter results, which showed gross premiums rose 17% to £751.2 million.

However, the firm bemoaned a "lack of major loss events" and strong competition.

The company 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."

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