German insurers aren’t placing bets on the 23 June Brexit referendum, according to a Reuters report.
Economists say that a vote to leave the EU would rock financial markets, and a poll conducted by Reuters found that economists think exiting the EU posed the biggest threat to growth in the UK. Right now, polls suggest the Brexit referendum could go either way.
Regardless, insurance companies in Germany are continuing to hold pound-denominated assets to match future obligations to UK customers, Reuters reported.
“We keep our obligations and our investments almost entirely currency matched, so we therefore have made sure that we have no open positions against the pound,”
Allianz Chief Financial Officer Dieter Wemmer told a conference call with journalists. “Otherwise, I'd say you can't prepare (for Brexit) because if the outcome is 50-50, it's a pure bet on which side to prepare for, it's like a tossing a coin.”
Reinsurer Hanover Re is taking a similar position.
“We have not placed a bet for either outcome,” CFO Roland Vogel told Reuters. “The British pound would certainly lose value relative to the euro, but that is always a two-sided game because the obligations would also become cheaper. We are and will stay invested in British pounds.”
