Brexit: Draft Deal Could Be Good News for UK Insurance Industry

Apparently there is a chance of a Brexit deal being agreed, which if true, should be good news for the insurance industry. It’s difficult to see a scenario where the EU creates barriers to international insurance cover, especially on commercial and marine, because such a situation would simply lead to a chaotic breakdown of trade for all parties concerned, plus test cases to apportion blame following an inevitable major incident.

Reaction from the ABI has been mainly positive;

Huw Evans, Director General of the Association of British Insurers, commented:

“It is vital for our industry’s customers that we have an orderly withdrawal process and transition period and any progress towards that is welcome. Regulatory co-operation is very important and must follow from any political agreement. 

“The crucial longer-term test is whether our future relationship with the European Union avoids our world-leading insurance & long-term savings sector becoming a rule-taker. The publications today begin a process of establishing what that relationship is but it is far too early to judge whether we will be able to avoid that fate.”

Meanwhile the comment from LIIBA sounds a warning on equivalence;

Responding to the text of the draft Brexit agreement reached by the UK and European Union, Christopher Croft, chief executive of the London and International Insurance Brokers’ Association (LIIBA) said:

“While it is encouraging to see a dedicated section on financial services, we have to hope that the fact the draft is solely built around the concept of ‘equivalence’ is for the sake of brevity and simplicity. Otherwise, those of us who have no equivalence regime have cause for serious concern. As do our clients.

“The current European legislation covering insurance brokers – Insurance Distribution Directive – has no concept of equivalence or the market access rights it might grant. Without this it is unclear what the agreement published yesterday would mean for our sector.”

Insurance-Edge Comment;

There is no way the EU will ever let the UK actually leave the union. We will always have to follow major changes in trade, human rights or financial services laws/directives. The UK will always have to pay billions simply to access the single market. The UK will always have to accept mass migration.

To expect otherwise would be to deny the entire history of the EU, and its overall aims and ambitions. Since the passing of the 1972 European Communities Act, which effectively signed away sovereignty to Brussels, the UK cannot decide anything fundamental as regards global trade without the assent of Brussels. That one single fact underpins membership – not any particular treaty or text -and our long term subjugation to the EU Parliament. Nothing in any Brexit agreement will ever change that political fact of life.

You can bet your house, and your company, on that.

 

 

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