The Brexit negotiations continue to drag on, with absolutely no sign of any clarity on future trade in goods and services. Control of trade is of course the whole point of the EEC cartel, which later became the EU, and Brussels will fight to the bitter end to retain that ultimate control. It is hard to imagine a scenario where the gatekeepers of prices, quotas, taxation and regulation in Brussels allow the UK to operate freely within the EU, offering insurance products which may well undercut French or German insurers, or simply offer more convenience – say in global marine cover.
What is bound to happen is that Brussels will place every obstacle possible in front of London based insurers, in order to damage UK financial services, or demand something similar to Danegeld as the price of EU market access. It was obvious this would happen right from the Leave vote in June 2016, and by not facing reality the UK government’s endless dithering stands to cost policyholders millions in extra costs.
For the industry as a whole, the eventual agreement with Brussels may cause a massive job loss in financial services, as companies re-locate to Belgium, France or Germany, simply to placate Barnier and his unelected tax collectors. You can that such demotion of London as a financial centre is at the heart of the EU’s negotiations, they will try their best to destroy London’s global reputation as a place to do deals.
Below, you will find the official response from LIIBA and the ABI. But behind the scenes the insurance industry would be well advised to form a trade delegation which can open communications with insurers, banks and politicians based in the US, China, Japan, Singapore and many other countries, so that concrete arrangements can be made for matters like re-insurance, global cover on storms, marine, cyber attacks etc.
The time to act is here, and waiting for the UK government to eventually capitulate to every ransom demand from Brussels is utterly futile. As an industry we must make our own deals, underwrite our own policies using a truly worldwide panel, and market British insurance services professionally and globally. There is still room for a small island to punch above its weight across international money markets.
In response to the government’s White Paper on Brexit, the London Insurance and International Brokers Association (LIIBA), commented:
“We are disappointed that the Government has not reflected the strong feedback from our industry that both EU clients and UK business would be best served by a mutual market access regime. We will work with our members to understand the full implications of what is being proposed. As always, central to that effort will be a focus on how we ensure that the client is the one to suffer least from the disruption Brexit will cause.
“The issue of contract continuity must be resolved. There is some doubt as to whether UK insurers will remain licenced to pay claims in a few EU countries without an agreement in place. We therefore support the call by the FCA Chief Executive Andrew Bailey for this to be resolved at official level. The sooner the better. Transition arrangements will only postpone the issue.”
“Publication of the White Paper is an important step in the Brexit negotiations. Whatever the final outcome, the insurance industry is too important to be a rule taker. Having to comply with financial regulations we have no say over would be the worst possible scenario for our world leading insurance sector, so we will look to the Government to negotiate a better outcome than this”.