14 June 2017

Commercial Risk Europe: Market tries to allay buyers’ fears it won’t be ready for Brexit

A clear majority of UK risk managers are worried that the insurance market is not prepared for Brexit and that they will face problems as a result, according to a snap poll carried out during the main panel debate at the Airmic annual conference.

The insurers and brokers on the panel, however, reassured Airmic members that they will be ready for the outcome of Brexit negotiations, even in the nightmare scenario that UK insurers completely lose passporting rights.

One of the brokers on the panel did point out, however, that while insurers may well have plans in place to ensure they can continue underwriting business in Europe, attention also needs to be paid to how that business will be processed and transacted on a day-to-day basis.

Chris Brown, partner with Lockton Companies, said: “I fear that the market may be moving along with a lack of pace in some respects. We have seen in the past that the insurers will implement what is needed but from a broking perspective we do have to make sure all the systems are up and running, so that the day-to-day business happens as it needs to. We have quite a long way to go. The insurers are doing what they see as a solution but the broking community has to make sure that the business can be traded on behalf of the clients,” he said.

BBC presenter Huw Edwards hosted the Airmic Leadership Debate, which focused on core insurance market topics such as Brexit, innovation, the role of the broker and pricing. Brexit, not surprisingly, was the first subject on the list.

Mr Edwards asked delegates whether they agreed or disagreed that the insurance industry is well prepared for Brexit and whether there will be major problems for insurance buyers as a result. Some 75% of the delegates disagreed that the market is well prepared.

Vincent Vandendael, chief commercial officer of Lloyd’s, said he was surprised by the result of the poll because he feels the industry is well prepared. He pointed out that Lloyd’s has already announced it will set up an insurance company in Brussels that will hopefully be open for business in time for the 1 January 2019 renewal season.

The panellists were asked if they thought that the London and wider UK market may lose business to carriers based in mainland Europe as a result of Brexit. They did not think there would be an exodus.

Mark Weil, chief executive officer of Marsh’s UK and Ireland business, said he is both pleased and surprised by how the market has reacted to Brexit so far and is confident that things will be “sorted out”.

Full article on Commercial Risk (subscription required)

© Commercial Risk Europe