While Britain leaving the EU will undoubtedly cause massive amounts of disruption in the insurance industry as negotiations play out, the International Underwriting Association of London (IUA) has stated the London market is resilient and well-positioned to respond.
In a statement released today, the IUA stated the role of financial services must form a key part of any discussions regarding what the new relationship with the EU will be.
“Clearly the UK’s decision to exit the EU presents challenges for London Market companies and uncertainty surrounding the potentially prolonged nature of this process will be problematic for future planning,” said Dave Matcham, chief executive of the IUA.
“Our industry is, however, experienced in responding to change.”
Matcham said the free trade benefits of EU memberships have been vital in maintaining London’s position in the market, whether insurers are located within the UK or mainland Europe
“We know that many companies will now be considering their own individual responses,” Matcham said. “Continued access to European markets is essential and will, I expect, be at the forefront of the process to respond to the referendum decision. The IUA will be working with the London Market Group to ensure our industry’s views are fully represented as developments continue.”
IUA’s research shows that more than 20 per cent of their members’ premium income comes from continental markets, so the maintenance of similar regulations between the UK and the EU is important.
“Outside the EU it will still be desirable for UK supervisors to have reciprocal arrangements in place with other national regulators,” said Matcham. “Otherwise we will see a duplication of compliance costs that will damage companies and escalate costs for clients.”
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