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The world's largest insurance market is making Brexit contingency plans as profits fall 30%

Mar 23, 2016, 19:12 IST

Reuters

Lloyd's of London, the world's largest insurance market, recorded a 30% drop in profits on Wednesday, stressing that Britain shouldn't vote to leave the EU on 23 June.

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The company's annual report said it had €2.9 billion (£2.1 billion; $3.2 billion) in pre-tax profit for 2015, down from €3 billion in 2014.

The drop was mainly due to a fall in returns on fixed income investments, which fell to £402 million, down a massive 60% from £1.03 billion the year before.

Lloyd's Chairman John Nelson was upbeat about the annual report, saying the profits were "healthy" in what was a "challenging macro-economic climate."

"Each year brings a unique set of challenges, requiring determination, innovative thinking and solutions. This year has been no different. In a market undeniably tougher than seen for many years, we have had to demonstrate our ability to adapt and take action. In these conditions, these results are creditable and a tribute to the continued skill and professionalism of the Lloyd's market underwriting community."

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Meanwhile, Lloyd's CEO Inga Beale told Bloomberg TV that "the benefit of being in the EU is enormous," noting that the EU had trading agreements with over 50 other markets, as well as a major deal with the US.

Reuters have said that Lloyd's are in the process of setting up contingency plans in case of a Brexit, which includes setting up new offices on the EU continent.

Last month Lloyd's chief risk officer said in a speech that the UK leaving the EU would not result in "regulatory Nirvana" and the Lloyd's was totally against a Brexit, according to the Financial Times.

"The UK's membership of the EU has been part of this success story," he said. "We believe that it will be key to our future growth and development as we deal with competition from other insurance centres around the world."

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