Brexit in Insurance - Thematic Research

Brexit in Insurance - Thematic Research

Summary

UK insurers have lost their passporting rights, losing the freedom to provide cross-border services to any European Economic Area (EEA) member state and vice versa. No decision on equivalence for financial services providers has been confirmed, which is of utmost importance to facilitate cross-border contracts. The UK’s departure from the EU will impact all insurance lines to some extent. For instance, red tape at the border means that transporting goods in and out of the UK has not only become more complex, but also costlier. The price of imported goods is set to rise, driving goods in transit premiums up. Supply chains may change, altering risks. Meanwhile, motorists traveling between the UK and the EU now need to obtain a Green Card from their insurance provider. Uncertainty continues to reign in post-Brexit UK. The full impact of the UK’s withdrawal from the EU, and the longer-term implications, are not yet fully understood.

This report explores what the UK’s withdrawal from the EU means to insurers. It explores how in the midst of political uncertainty, some insurers prepared for a no-deal scenario. The report discusses regulatory changes brought about by the end of the transition period, as well as drivers that could play a role in the future at a time when the relationship between the UK and the EU is still not fully understood. The report also reviews the insurance lines that will be most disrupted by the UK’s decision to leave the EU - goods in transit, farming, motor, and travel.

Scope

• Uncertainty in the Brexit negotiations prompted big insurance names to prepare for a no-deal scenario, transferring business from the UK to existing or new EU-based carriers.
• UK insurtechs and other startups risk losing funding and EU talent as the free movement of people has come to an end.
• Some insurance lines can benefit from Brexit. UK/EU border chaos and increased custom checks will boost the price of freight goods and foodstuffs, thus increasing cargo and goods in transit insurance premiums.
• Brexit comes at the same time as COVID-19, which has already weakened the UK’s economy.

Reasons to Buy

• Understand what the loss of passporting rights and the UK-EU Trade and Cooperation Agreement means to the insurance industry.
• Identify which insurers prepared for a no-deal scenario and are now less impacted by Brexit.
• Get to know about the insurance lines most disrupted by Brexit.
• Discover how insurance could change amid post-Brexit uncertainty.
• Benchmark your company against the rest of the market.