Non-life insurance gaining strong momentum

Luxembourg’s traditional strengths in the insurance sector have been in the life and reinsurance domains – however, as a result of the UK’s decision to leave the European Union, Luxembourg is taking on an increasingly important role as a major European hub for non-life insurance.

The Grand Duchy has over the past two years become a cross-border hub in the non-life insurance sector as a number of major insurance companies have chosen to set up their post-Brexit EU headquarters in Luxembourg. The decision of major global non-life insurance companies to base their European hub in Luxembourg was taken for a combination of reasons following a strict due diligence of alternative EU financial centres.

Europe remains a key strategic market for us. Brexit didn’t change that. On the contrary, a lot of our policyholders are quite happy to have their risk carrier in the EU, with close proximity between our branches and their operations.

Dirk Billemon
General Manager, Liberty Mutual Insurance Europe

It is crucial for any company with global ambitions to be well represented within the European insurance market. Europe is a huge and mature insurance marketplace for us.

Thomas Brazil
CEO, Sompo International Europe

More than a dozen UK-based insurers have announced plans to move to Luxembourg and make it their new EU financial hub. Many of them are international non-life insurance undertakings. Maintaining access to the Continental European insurance business is a key strategic interest for many international non-life insurers. As a consequence, insurers formerly based in the UK have been shaping strategies to retain their EU passporting rights by the establishment of European subsidiaries in Luxembourg.

With more than 11 billion euros of direct collected premiums in the international non-life sector, Luxembourg recorded unprecedented growth of +240% in 2019. All these new insurance players have further consolidated the three main areas of business: General liability, Property and Credit which account for a total market share of 90% of Luxembourg’s international non-life business.


The greater part of the insurance business written in Luxembourg finds a market in continental Europe and Luxembourg’s central location at the heart of the EEA is certainly a competitive edge. The country has a long record for financial and political stability and an experienced and well-respected dedicated insurance regulator expert in cross-border insurance solutions.

The multinational make-up of the Grand Duchy’s workforce also helps insurance firms tackle the cultural and linguistic barriers to marketing cross-border financial and corporate insurance services in other European member states.

The international outlook and availability of expertise on a variety of markets, from a regulatory perspective as well as commercial considerations, within the Luxembourg financial ecosystem also provides insurance companies with valuable input and comparison factors which help insurers perfect their business models and expand into additional EU markets.

Luxembourg is located in the heart of Europe and is home to many EU institutions. That coupled with a strong economy, a stable political landscape and a solid infrastructure really creates an environment of stability.

Thomas Lillelund
CEO, AIG Europe

We benefit from a stable country with AAA rating and a very well respected regulatory and legal environment. Luxembourg’s central location in the EU and its proximity to France, Germany and Belgium give us access to a lot of great qualified staff.

Thomas Brazil
CEO, Sompo International Europe

Whilst some insurers have set up subsidiaries in Luxembourg to ensure continued access to the EU internal market, other global players have decided to use Luxembourg as a complementary financial hub to reinforce specific links in their global value chain, such as their capital market activities. In such cases, the Grand Duchy is not pursuing a strategy of enticing firms away from their current domicile. Luxembourg’s approach is one of highlighting its potential role as a complementary financial hub to a firm’s existing base of operations. In this way, Luxembourg’s financial sector cluster supports global insurers access new EU markets by leveraging the country’s thriving and well-established financial ecosystem.

Insurance and credit risk transfer markets

The non-life insurance industry is fundamental for the wellbeing of banks, businesses and financial institutions and also for the effective functioning of capital markets. Insurers provide financial companies with insurance coverage for their credit and financial risks while developing complex financial products which are capable of creating intertwined connections between banking and insurance financial instruments.

Insurers traditionally transfer the credit risks they insure against, either by directly accessing capital markets using financial instruments and derivatives or resort to reinsurance vehicles.

Insurance-Linked Securities (ILS) are financial instruments designed to transfer various types of insurance risks onto the capital markets. As growth in the global demand for insurance has exceeded that of traditional reinsurance schemes, insurers and reinsurers are increasingly tapping into the ILS market. ILS provide help insurers diversify their portfolios and so safely navigate periods of financial market distress.

Luxembourg is a very good country to develop new financial and insurance products. Whether in the form of classic insurance products or alternatives like insurance-linked securities, it is essential that financial markets can offer risk transfer schemes. In this way, insurance companies are central to the financial market.

Dirk Billemon
General Manager, Liberty Mutual Insurance Europe