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Brexit threatens Britain’s role in risk transfer, Aon says

NEW YORK (Bloomberg) — Aon chief executive officer Greg Case, who moved the insurance broker to London from Chicago four years ago, said Britain's centuries-long leadership in the industry would be damaged if voters choose to leave the European Union.

“The UK has been at the centre of insurance and risk management since maritime trade and shipping was insured at Lloyd's in the City of London more than 325 years ago,” Case said in a letter posted yesterday on the company's website. “Leaving the EU jeopardises the UK's leading position in the epicentre of our global service economy.”

Industry leaders have been stressing the benefits of global commerce, along with the risks of isolationism, ahead of the June 23 vote. American International Group CEO Peter Hancock said last week that he'd consider establishing a European operations hub beyond London if the “Leave” side prevails.

Case said Aon may not be able to provide the same coverage options to clients if trade barriers increase. He also said the company would find it harder to recruit and retain top talent.

Aon moved its headquarters to the UK in 2012, citing improved access to Lloyd's of London and emerging economies. Lloyd's is the world's oldest insurance market and is used by businesses seeking to guard against large or complicated risks. Aon's shift also provided tax benefits.

Case's company acts as a middleman in the insurance industry, helping clients arrange coverage to guard against risks ranging from natural disasters to bed bugs to lawsuits. It is the second-largest broker by market capitalisation to New York-based Marsh & McLennan Cos.

“In our world, risk is inevitable and we manage it accordingly,” Case wrote. “But leaving the EU is an unnecessary gamble.”

Aon climbed 95 cents to $107.81 in New York, extending its gain for the year to 17 per cent as global stocks rallied after weekend polls showed “Remain” prevailing in the UK vote. Marsh & McLennan rose 76 cents to $66.62 and is up 20 per cent since December 31.

Aon CEO Greg Case

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Published June 21, 2016 at 9:00 am (Updated June 20, 2016 at 9:16 pm)

Brexit threatens Britain’s role in risk transfer, Aon says

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