Just one day on from UBS Wealth Management releasing new data suggesting that insurers would be among the worst affected by a UK decision to leave the European Union (see Report: Insurers to be “worst affected” by Brexit
), several key players in the industry have hit out at the possibility of an exit.
Today, the International Underwriting Association of London (IUA), along with Lloyds, and Richard Brindle, the group chief executive officer of Fidelis, have issued a collective position paper warning of the negative effects that a ‘leave’ vote could have on the industry.
Among the claims they have issued are that job losses would be “highly likely” and would impact not only the 34,000 people employed in the city’s commercial insurance sector, but also tens of thousands who are indirectly employed in the area.
According to Dave Matcham, chief executive of the IUA, underwriting companies are already making contingency plans to move elsewhere in case Britain votes to leave the EU.
“Feedback from our members clearly shows that the benefits of EU membership are highly valued and the possibility of these advantages disappearing is of grave concern,” he said.
“An IUA member survey shows at least six firms would reconsider the legal status of their London operations in the event of a leave vote, though there may be others. Passporting rights within the single market are particularly important, ensuring that firms are not obliged to maintain expensive capital holdings in each of the EU member states in which they operate.”
Warning that foreign capital is also likely to leave for more trade-friendly jurisdictions, Inga Beale, the chief executive of Lloyd’s added her own concerns.
“Lloyd’s sits at the heart of the London insurance market and it is the global scope of our activities, the framework that we provide to transact insurance business across the EU and the rest of the world that attracts the industry’s leading talent and most committed investors to London,” she said.
“Lloyd’s firmly believes that to remain part of the EU is in the best interests of the Lloyd’s market and of the wider London insurance market, which contributes £12 billion to the UK economy and employs over 34,000 people in London alone.”
Further concerns were expressed by Richard Brindle who believes that the EU is a key component in Britain attracting foreign investment.
“London has centuries of insurance history, and remains the world’s leading insurance market, largely because it is outward-facing,” he said.
“It attracts foreign investment because companies in Britain can access the EU and the global market through a single operation. Brexit would jeopardise our leading position, and bring no advantage from any perspective, whether regulatory, economically or for our reputation. It’s highly likely that if we were starting a business post a Brexit vote, we would be headquartered elsewhere in the EU.”
Report: Insurers to be “worst affected” by Brexit
Hiscox won’t return to UK after Brexit
Minister: Brexit may give UK £2bn for farmers’ insurance