According to LSM, the move follows a detailed analysis of potential jurisdictions, with the aim of ensuring that the company’s post-Brexit structure fits with its European strategy.
Once it has received regulatory approval, LSM will operate through an insurance company and insurance intermediary domiciled in Luxembourg.
LSM, which will retain its London office, is continuing to analyse potential structures for its new EU operation.
According to Nick Metcalf, president and managing director of LSM, the company has “ambitious plans for growing the business that we do within and from the EU, and Luxembourg best fits the design principles we set ourselves to best position our post-Brexit structure".
Metcalf said: “It is important to us to locate ourselves in a robust regulatory environment, and Luxembourg offers us exactly that. The regulator is well-respected, pragmatic, and insurance-specific and so understands the market very well.”
He added: “Our primary objective was to minimise disruption to our clients and policyholders and employees, and I hope to be able to demonstrate how we have achieved that, when we set out how our new structure will work after the summer.”
“For our clients it will be very much business-as-usual. Europe is a key market for us and we are working towards expanding our capabilities and product offering in Europe over the coming months and years.”
In March, Lloyds of London also announced that as part of its post-Brexit plan it would be opening a new EU insurance company in Brussels.