Alan & Thomas Commercial Insurance | News
UK on course to leave EU
Britain’s decision to leave the European Union will have consequences for all businesses, not least for the insurance industry. Brexit means that UK insurance providers will be removed from one of the largest single markets worldwide.
This may mean that insurers will have to establish new subsidiaries within the EU; which would be expensive, involving new recruitment, new capital needs, and potentially new legislative requirements.
Pro-Brexit campaigners have argued that there is no reason that free trade negotiations cannot be negotiated between the EU and the UK, citing Switzerland as an example. A prosperous non-EU country, Switzerland still has access to the Euro market, and continues to be one of the biggest names in the insurance industry throughout the world. Advocates of Brexit speculate that our departure from the EU will result in a stronger, and more competitive, UK insurance industry.
However, some experts believe that retaining influence within the EU is vital for the future growth of UK businesses. For example, although Lloyds of London have spent hundreds of millions of pounds due to the EU’s Solvency II Directive they are still concerned about leaving the EU.
They believe that British insurers need to operate globally in order to stay competitive, and being part of the EU guarantees this as Europe negotiates with both the US and Asia over trade-free agreements.
Although negotiations with Europe have begun in earnest it is still uncertain how leaving the EU will affect the UK insurance industry. Brexit is very much a step into the unknown, and there is much trepidation concerning our imminent departure amongst an industry that thrives on certainty.
The Solvency II Directive was very unpopular, but thoughts of a Utopian insurance industry unshackled from EU legislation are probably naïve as UK legislation is likely to be just as demanding.
Contact one of our team if you have any questions or would like a quote on 01202 754900 today!