The latest polls suggest there has been a sharp swing towards the possibility of the UK leaving the EU – and that could spell doom and gloom for the insurance industry, if new research is to be believed.
The Financial Times
has published the results of a study from UBS Wealth Management, predicting that sterling could slump by as much as 15 per cent if voters decide that the UK should leave, while the FTSE100 is also predicted to drop by around 10 per cent.
The fall for the FTSE100 is what is of particular note for insurers, according to the analysis. Speaking to the publication, Caroline Simmons, of UBS Wealth Management, remarked that the slide would see valuations plunge to levels “seen during the 2012 euro crisis” and that insurance companies would be the worst affected, along with retail and leisure stocks, housebuilders and banks.
Companies that have cross-border trade are also likely to be hit, according to the report, with export companies facing rising costs.
As for sterling, it was predicted to slide around nine per cent against the euro compared to today’s level; and by 16 per cent from its 2015 peak. Its value would be around €1.20 – a level it hasn’t touched for two years. Against the dollar, however, it has been estimated to drop by an eye-catching 15 per cent – to around $1.25, a level it hasn’t seen since 1985, the year of the first mobile phone call in this country.
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