British ship insurer London P&I Club is setting up a new subsidiary in Cyprus to ensure continued access to trade in the European Union in case Britain loses single market access, the group told Reuters on Friday.
Britain dominates the global marine insurance market and losing access to specialist Protection and Indemnity (P&I) clubs could weaken its multi-billion pound shipping services sector.
“We have … chosen Cyprus to establish our new post-Brexit EU subsidiary, and we are currently going through the process of setting it up and obtaining the necessary licence,” London Club said in a statement.
London Club is one of 13 major global P&I insurers and Europe accounts for over 60 percent of the group’s activities.
The six P&I clubs regulated in Britain are estimated to account for over half the revenue of an industry that insures about 90 percent of the world’s ocean-going tonnage.
The other five clubs have opted for European hubs in Holland, Ireland and Luxembourg.
Many of these clubs – owned by shipping companies – have been an integral part of the City of London for nearly two centuries, insuring ocean going ships against pollution and injury claims, typically the biggest costs when a vessel sinks.
Hull and machinery cover, which protects vessels against physical damage, is provided separately by other marine insurers.