What does Brexit mean for Hiscox?

As a result of the UK’s decision to leave the European Union, we are making some necessary changes to our business structure to ensure continuity of cover to all our customers with European risks.

Brexit is structural not strategic for Hiscox, so in most cases you should see and feel very little change from us, if any at all.

A key implication of Brexit is the loss of ‘passporting rights’ which allow Hiscox to conduct cross-border business throughout the European Economic Area (EEA) through our branch networks across the UK and Europe. Hiscox currently operates in Europe through an insurance company (Hiscox Insurance Company Limited), an agency (Hiscox Europe Underwriting Limited) or via Lloyd’s of London, all of which are registered in the UK and will therefore lose their passporting rights. Our priority is to ensure we can continue to provide products and services to policyholders with EEA risks, no matter which part of our business they deal with.

To address this, we have established a new European insurance company in Luxembourg, called Hiscox S.A., which will become the new home for many of the European risks we write. Hiscox S.A. received its licence from the Luxembourg regulator in January 2018 and has an ‘A’ rating from S&P.

We propose transferring all relevant live policies and historical liabilities from Hiscox Insurance Company Limited into Hiscox S.A. under Part VII of the Financial Services and Markets Act 2000. It is anticipated that the Proposed Transfer will become effective on 1 January 2019 with new business being written into Hiscox S.A. from the same date.

We are also obtaining approval from the relevant authorities to establish a new European insurance agency to operate in the EEA.

For the European risks we write through Lloyd’s of London, we intend to utilise the Lloyd’s Brussels subsidiary when it is established, and to follow the Lloyd’s solution where we can. We are also working with Lloyd’s to establish the appropriate procedures for writing policies that have both EEA and non-EEA risks. Where we work with coverholders (or anyone with underwriting authority) that are writing EEA risks through the Hiscox Syndicates at Lloyd’s, we are working to ensure the appropriate new Lloyd’s approval and/or underwriting authorities are in place.

We will update this page as our plans progress over the coming months so do check back here for further updates.

Documents and FAQ

More information relating to the Part VII transfer will be available here from summer 2018.

A Part VII transfer is a legal process in which some or all of the insurance policies of one company are moved to another at a fixed time and date known as the effective date. It is subject to approval by the High Court of England and Wales.

In this particular case, it is proposed that we move affected live policies and historical liabilities from one Hiscox legal entity to another to ensure we can continue to serve our customers with European risks post-Brexit.

We are still working on our Part VII transfer plans and will have more to share on this soon. We expect to be able to contact policyholders, claimants as well as other interested parties over the summer with more information about the Proposed Transfer, how they can raise any questions or concerns they have and the rights they have if they believe that they may be adversely impacted by the Proposed Transfer. The Part VII transfer is an important part of our Brexit solution and we believe this plan positions us well to continue to serve all our customers with European risks.

Protecting our customer’s data is a top priority, including when it is an internal move such as this, i.e. from one Hiscox legal entity to another.

The Part VII transfer follows strict legal and regulatory processes which also help to safeguard policyholders’ interests. It does this by:

  • appointing an Independent Expert who produces a report for the High Court that analyses the likely impact of the Proposed Transfer on policyholders;
  • allowing policyholders and interested parties to raise questions or object to the Proposed Transfer either to the High Court or Hiscox, all of which will be communicated with the PRA and FCA, the Independent Expert and heard by the High Court.
  • close consultation with the PRA and FCA who will provide a report to the Court on the Proposed Transfer.
  • the approval of the Proposed Transfer by the High Court.

It simply means that your policy will move from one Hiscox legal entity to another. This is a structural change only; it will have no impact on your type/level of coverage, and there won’t be any lapse in coverage to your policy.

There’s nothing for you to do for now. We will keep you posted as our plans progress over the coming months via updates to this page.