A number of international financial services companies have told the Government they plan to relocate activities here from London because of Brexit but have yet to make their plans public, the Minister of State for Financial Services has said.
Speaking to The Irish Times in the wake of AIG's decision to relocate its European regional headquarters to Luxembourg instead of Dublin, Minister Eoghan Murphy said: "There's going to be an ebb and flow to this. Some companies are going to come to Ireland, but not all of them. We have been very clear about that."
Mr Murphy said there has been “significant” engagement from companies with the Government in the first quarter of this year. “We are confident that a number of positive decisions will be announced throughout the year.”
He declined to say how many firms had indicated that they would relocate operations to Ireland, or how many jobs might be created. He reiterated previous comments to the Oireachtas Finance Committee that some relocation of staff here from London would not be attributed to Brexit for political reasons.
In the case of AIG, it is understood that Dublin finished as runner-up to Luxembourg from a shortlist of locations across Europe
Redoubling efforts
AIG’s announcement prompted industry representative group Insurance Ireland to call for a “redoubling of efforts by the Government and its agencies, in conjunction with the insurance industry, to secure investment opportunities” arising from Brexit.
According to Insurance Ireland chief executive Kevin Thompson, AIG's choice of Luxembourg highlighted the "competitive landscape for investment decisions" and said the Government needed to maximise Ireland's existing strengths as a hub for insurance activities.
Mr Murphy responded by saying that “no stone is being left unturned” in the bid to win investment. “Insurance Ireland knows how much work the Government is putting into the insurance and reinsurance industry,” he added.
On Wednesday, AIG Europe's chief executive, Anthony Baldwin, wrote to the Minister to thank him for his engagement with the firm as it weighed up its post-Brexit options.
Mr Baldwin told Mr Murphy that he had been "extremely impressed" by the rigour and experience of the Central Bank and was grateful for the insights shared with the company.
“Our Irish business will continue to focus on growth and on meeting the needs of our customers in the Irish market,” he said. “Ireland has much to offer the insurance sector as our industry adapts to the future.”
AIG employs about 400 Irish staff across a range of activities, including property casualty, IT, treasury and asset management. It also owns health insurer Laya, which is No 2 in the the market to State-owned VHI and has more than 450 staff.
Smooth operation
In a statement issued on Wednesday, AIG said the move to Luxembourg would ensure the “continued smooth operation of its business across the European Economic Area [EEA] and Switzerland” once Britain leaves the EU.
From 2019, AIG proposes to have two subsidiary insurance companies in Europe: one in the UK to write local business and one in Luxembourg to write EEA and Swiss business, which will have branches across the region.
AIG currently writes business in Europe from a single UK-based insurance company, AIG Europe Limited. Britain is AIG’s largest single operation in Europe, and the company said it would continue to support its European operations from the UK.
Mr Baldwin described it as a “decisive move” by the insurer. “AIG sees opportunity in the ongoing resilience of the UK insurance market.”
