05 February 2021

CRE: Two thirds of Airmic members fear additional insurance costs from Brexit

The association’s latest Pulse Survey, carried out among its members in January, finds that UK insurance buyers are worried they will have to fork out for issuing additional local polices and fronting costs.

Just under two thirds (63.5%) of Airmic members are concerned that there will be additional insurance costs following the EU-UK post-Brexit deal agreed in December.

The association’s latest Pulse Survey, carried out among its members in January, finds that UK insurance buyers are worried they will have to fork out for issuing additional local polices and fronting costs.

A number of respondents are also concerned about the longer-term impact of Brexit on market capacity, increased paperwork and whether the UK insurance sector is losing its position and relevance.

They question whether UK-domiciled insurers can still create a single policy covering both the UK and the EU. Airmic members are also unclear whether their organisation’s current insurance policies will still provide cover in the EU and pay claims arising from EU territories.

Airmic said the survey revealed a number of other Brexit-related issues.

Members are concerned about the effects of the UK government’s post-Brexit insurance framework review, and whether Solvency II will stay as it is.

And they raised issued for captives, particularly whether EU captives will retain or regain passporting rights into the UK under the Brexit deal.

The latest Pulse Survey also finds that almost half of UK insurance buyers polled have seen a rise in claims challenges last year. Additionally, they report that the commercial market continues to deteriorate, with mounting capacity issues and coverage exclusions alongside higher rates and generally difficult renewals.

The survey reveals that more companies are looking to create captives in response to the increasingly difficult commercial market. Some 23.4% of UK buyers surveyed are now considering forming a captive, up from 20.3% in the previous Pulse Survey. In addition, more companies are using existing captives.

CRE

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