Insurers need to keep pushing their priorities now for an effective Brexit plan, writes Andy Watson, CEO of Ageas UK, urging the industry to work with the government to achieve a realistic negotiating strategy.
For more than two years it’s been difficult to pick up a newspaper, or watch a news broadcast, that doesn’t include the latest on Brexit negotiations. To some extent, we’re all getting Brexit fatigue.
I haven’t expressed a public opinion on Brexit before. I’ve now decided to enter the fray because of the arrival of Project Fear - Part Two that we’re witnessing in the media every day about how Britain will cope with No Deal. It’s obvious to all that we’re running out of time for our government to give us the surety they promised when the public were asked to vote on whether we stay or leave the European Union.
Although we absolutely respect the decision of British voters, the majority of our industry has been clearly disappointed about the decision. Indeed, shares across the insurance sector fell heavily in the wake of the vote. Our perspective is unsurprising, considering the commercial advantages that operating in a single market has given us, particularly the EU passporting system.
All of this will almost certainly be lost next year if the government sticks to the plan outlined in its recent White Paper to leave the EU Single Market and the passporting system. We are also left in some doubt about whether UK insurers will be licenced to pay claims in EU countries after March 2019, which could mean escalating travel insurance premiums, with the likely demise of the European Health Insurance Card for UK travellers in Europe.
With time for the UK to reach an agreement rapidly running out and Parliament currently on recess, it’s not particularly surprising if we default to Private Frazer of Dad’s Army’s favourite catchphrase: “We’re doomed!”. While that conclusion seems reasonable, it’s not going to give our industry the certainty we need to protect our customers.
We have to act, and by that I don’t mean look for alternative locations outside the UK. We have to prepare, we have to keep pushing our priorities for an effective Brexit plan and we have to continue to demonstrate how central the insurance industry is in driving greater productivity and growth in the economy.
Our industry, the 300,000 people employed in the sector and everyone whose homes, businesses, vehicles and lives we protect are too important to be placed in jeopardy.
And we must maintain focus on our priorities too. By example, as a major general insurer, we are hugely supportive of the wide-scale rollout of smart home technologies, the ambitious insurance proposals being introduced via the UK’s world-first Automated and Electric Vehicles Act and of course the much needed reforms that will be introduced with the highly anticipated Civil Liability Bill.
We have ambitious agendas, so now is the time for us to work with the government to ensure we remain closely aligned to achieve a realistic negotiating plan and one that does not place us in the position where we are rule takers from the EU rather than rule makers.
But we must not add to Project Fear. To coin another Dad’s Army favourite, “don’t panic!”
Zurich disappointed in new #discountrate. David Nichols, Ch Claims Officer: "The failure to change the discount rate to a balanced level will only serve to increase the cost and, therefore, affordability of certain types of insurance - especially for higher risk customers." pic.twitter.com/ac1CfBzfxX— Zurich Insurance UK (@ZurichInsUK) July 15, 2019
- Analysis: Industry faces financial blow from discount rate revision
- ‘Bad outcome’ for industry as discount rate revised to -0.25%
- Allianz and LV win big at 2019 British Insurance Awards: Full list of winners
- British Insurance Awards 2019: Commercial Lines Broker of the Year - SME/Mid-Corporate - Towergate Insurance Brokers
- Majority of disputed claim rulings are won by insurers
- Zurich names Amanda Blanc's successor
- Ageas confirms Axa's Waks as chief risk officer for UK