In December 2017, the European Insurance and Occupational Pensions Authority (EIOPA) issued an Opinion on service continuity in insurance linked with the withdrawal of the United Kingdom from the European Union. In the Opinion, EIOPA urged insurance undertakings to take necessary steps in good time to ensure the continuity of cross-border insurance contracts between the United Kingdom and the European Economic Area without the United Kingdom (EEA30) after the withdrawal of the United Kingdom.
In case of a withdrawal without an agreement, 9.1 million EEA30 policyholders might face uncertainty and delays in receiving payments. This is significantly down from the total 38 million EEA30 policyholders with a cross-border contract, which shows the extent of action by UK insurers with large cross-border business. The residual cross-border business concerned have insurance liabilities of EUR 7.4bn. The residual business of insurers from the United Kingdom and Gibraltar without sufficient contingency plans represents (in terms of insurance liabilities) only 0.16% of the overall insurance business in the EEA30 countries.
The majority of the business (with insurance liabilities of EUR 5.4bn) relates to a handful of insurers in the United Kingdom. The remaining business has mainly low value and short-tail liabilities. Overall, 75% of the contracts concerned belong to portfolios with average written premiums of less than EUR 100 per year. On average, the remaining duration of liabilities of 76% of the contracts is less than two years. The majority of the contracts are with non-life insurers. Only 3 % of the potentially affected policyholders have a contract with life insurers.
Based on the data collected through the monitoring of the contingency planning and in particular due to the nature and scale of the business concerned, EIOPA's assessment is that the service continuity issue does not give rise to financial stability risks. However, EIOPA will continue to closely monitor and assess potential financial stability risks.