A panel of experts has told brokers at the British Insurance Brokers' Association annual conference that they need to be preparing for the UK's exit from the European Union and analysing their customers’ exposure.
Ian Cooper, partner and head of regional business at Lockton and chair of the broker’s Brexit Committee, warned the audience: “If as an industry we get this wrong it has some serious and grave consequences.”
Likewise former MP and MEP Jonathan Evans advised that it was “crucially important that an agreement on financial services is made”. However, he was more upbeat than others that it could be achieved.
“The UK’s negotiating position is not a hopeless one,” he stressed.
And Paul Merry, partner in the global strategy group at KPMG, set the scene listing that 260 firms from the UK do business on a freedom of services basis while 700 work in the opposite direction from Europe to the UK.
He urged the audience to undertake an impact assessment for all business that touches the EU, told brokers to familiarise themselves with insurers’ plans and to consider their own options and potential action plans.
However, all the panellists accepted there was a limit to what could be achieved with negotiations still continuing and due to come to a head in October. In essence concrete details remain sparse.
“It feels like the UK government is fighting among itself rather than negotiation with the [EU],” observed Cooper.
It was a view echoed by Evans: “The British government has to get to a position of one clear objective and infighting in the Cabinet has prevented that.”
Charles Manchester, CEO of Manchester Underwriting Management, said he was confident that a transition period would be delivered.
With policies now being written that cross over into April 2019 the issue of how the UK exits the EU is particularly live in insurance.
“It would be electorally stupid of anybody to create a scenario where voters in their countries would not get fulfilment of their insurance,” predicted Manchester.
“One way or another we will be able to fulfil the policies that are written today.”
As part of a wide ranging discussion the commentators also took questions from the audience.
One broker noted that they had voted remain and asked if there were any opportunities for the insurance sector arising out of Brexit.
Merry accepted that at the moment insurers can only see “various barriers that they have to get across”.
He assessed that the preparation process had delivered more strategic and focused businesses which enjoyed better relationships with regulators than ever before but accepted that might have been delivered anyway.
“They [insurers] are still not looking for competitive advantage,” he stated adding it would develop in the run up to March. “People are focused on the here and now.”
Evans responded to the questioner by highlighting that he too had voted remain but believed a Brexit had to be delivered.
And Manchester concluded that he could see one positive: “The Prudential Regulation Authority will be able to decide whether to authorise unrated, under-capitalised insurers that formally would have been able to passport in,” he flagged.
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