Sunday 25 June 2017

Insurance giant AIG asked Noonan if Irish move would be welcomed

Finance Minister Michael Noonan
Finance Minister Michael Noonan
John Mulligan

John Mulligan

US insurance giant AIG has asked the Government how it would view an application to move the company's European headquarters from London to Dublin, as the company eyes a post-Brexit shift.

AIG's chief financial officer, Sid Sankaran, the chief executive of its consumer division, Kevin Hogan, and Declan O'Rourke, the head of AIG's operations in Ireland, met with Finance Minister Michael Noonan last month.

Mr Sankaran and Mr Hogan are both board members of AIG.

While the meeting with Mr Noonan largely revolved around emerging political issues in the US and Europe, the AIG executives also broached the possibility of AIG moving its European HQ to Dublin, and queried how such a move might be met by Government.

It's almost certain that Mr Noonan was open to the idea, and it's thought he expressed his view that AIG was well-regarded in the industry and by regulators.

Anthony Baldwin, the ceo of AIG's European and UK arms, has previously said that Dublin was among the cities being considered if AIG moves its London-based European HQ.

AIG employs about 2,500 people in Britain, not all of them at the head office.

"At a certain point in time you've got to pull the trigger, absent of any clarity on where negotiations are going in the transition period," Mr Baldwin told an Association of British Insurers conference in November.

AIG moved its European HQ from Paris to London about five years ago.

The process, from making the decision to move to completing the transition, took 18 months and affected a couple of hundred employees.

Mr Baldwin said at the conference that AIG could make a decision in the coming year about its European HQ and where it will be based.

However, he insisted that AIG would continue to have a significant London hub.

The fact that senior AIG board members have already raised the topic with Mr Noonan will intensify speculation that the company is seriously considering a move.

The boss of asset manager Irish Life Investment Managers (ILIM), Patrick Burke, said this week that the firm has received more than 50 enquiries from companies considering moving operations from the UK following June's Brexit vote.

ILIM's assets include a portfolio of premium office blocks, with some major projects due to come to the market this year, including a huge complex on Dublin's George's Quay that was formerly home to Ulster Bank.

Mr Burke said the enquiries from UK firms were mostly from companies involved in financial services, most of which already have operations in Ireland.

It's likely that most companies thinking of moving operations out of Britain to other European locations will make decisions on doing so within the next six months, given the time required to move.

The IDA has also been handling a large number of enquiries from potential clients considering moving activities to Ireland as the UK leaves the EU.

IDA chief executive Martin Shanahan said last week that Japanese financial services firms have also expressed an interest in moving operations to Ireland from London as a result of Brexit.

UK prime minister Theresa May hopes to begin formal EU exit negotiations in March and to complete them by 2019.

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