As the Brexit process moves forward and insurance companies prepare for the UK’s divorce from the European Union, stakeholders in the US are also getting ready for a new era of political and economic relations between the two countries.
The American Insurance Association (AIA), the trade association for leaders in the P/C insurance industry, announced on September 12 that it will be joining the new US-UK Financial and Related Professional Services Coalition in order to foster discussion from both sides of the pond on trade and investment, among other issues.
“With the advent of Brexit, the trade and regulatory relationship between the US and the UK may change significantly in the near future,” said Steve Simchak, vice president and chief international counsel for AIA who’s been leading the efforts on this coalition. “Since the UK and the US are arguably the two most [well-known] insurance markets in the world, we felt it was very important that the insurance industry both in the US and in the UK be part of the collaborative efforts amongst the financial services industries to engage with both of our governments on bilateral trade and regulatory issues.”
The formal coalition has only been in the works for the past few months, but the AIA decided that it would be a smart move to have more processes and structures in place for US and UK insurance industries to coordinate their communications with their governments and with each other, added Simchak.
The coalition has put forward three main themes: promote deeper regulatory cooperation for the benefit of market participants, clients, and investors; maximize cross-border market access; and recognize the important role that the changing technological landscape plays in financial services.
“That’s an emerging area with both governments right now, so we thought it would be a useful purpose for this coalition to communicate with our governments about the best way to regulate fintech and insurtech, and whether there can be some transatlantic or US-UK regulatory cooperation on fintech and insurtech,” said Simchak.
The uncertainty in what a post-Brexit world will look like is one of the challenges that Simchak predicts will impact the coalition, but likewise underscores its importance.
“The Brexit process is ongoing and nobody knows yet what the financial services relationship between the UK and the EU will be, which of course will then inform the relationship between the UK and the US,” he explained. “Recognizing that there will be challenges in negotiating agreements and in structuring the new relationship between the US and the UK is really one of the reasons why we formed this coalition. We’ll do better as an industry in our ability to inform our governments if we can work together to overcome those challenges.”