As insurers take hit from the UK’s decision to leave the EU, an industry body is allaying customers’ immediate fears following the historic referendum last week.
The Association of British Insurers (ABI) have reassured customers with insurance and long-term savings products that they need not take immediate action in the aftermath of the Brexit vote, which has pulled down the share prices of UK insurers.
The ABI said customers should not make hasty financial decisions, reminding them that the UK remains a part of EU until the Brexit process is complete.
“The UK insurance and long-term savings industry is strong and built to protect customers from market uncertainty and shocks,” the ABI said.
According to the industry body, there will be no immediate changes to customers’ existing travel and motor insurance policies.
Travel insurance products will continue to offer all prevailing cover while motor policies will still automatically cover individuals for the minimum legal requirement in EU countries.
Existing contracts with non-UK insurance companies and pension providers will also remain unchanged for now, the ABI added.
The organisation also reminded pensioners that their finances are being overseen by professionals who have strategies to minimise the impact of any periods of poor performance.
Insurers, leading firms and organisations have given mixed forecasts for the industry following the Brexit vote.
The International Underwriting Association of London said the industry will weather the Brexit impact, while Munich Re
claimed that the sector may even be spared.
AM Best said financial market volatility could have a material impact on insurers’ half-year results and balance sheets, although it is not expecting to take ratings action anytime soon.
Global consultancy firm Ernst and Young also said the Brexit vote “has the potential to have a significant impact on insurance companies’ operations and the needs of their clients.”
Host of UK-listed insurers take Brexit hit
Brexit impact may not be severe for insurance: Munich RE
Brexit seen to take ‘significant’ toll on insurers
IUA says London market will weather Brexit