Press Release - AUGUST 03, 2018
Best’s Briefing: Insurers Step up Brexit Plans in Absence of Clarity
FOR IMMEDIATE RELEASE
LONDON - AUGUST 03, 2018
The Best’s Briefing, “Insurers Step up Brexit Plans in Absence of Clarity” examines how insurers in the U.K. that access business in the other 27 EU countries are putting in place arrangements to ensure that they are able to provide insurance services in the EU post-Brexit. The ability to continue to conduct cross-border business is a particular concern for Lloyd’s, the London market and other U.K.-based commercial insurers. It is less of an issue for retail insurers as they principally underwrite domestic business.
Catherine Thomas, senior director, analytics, said: “Insurers are also addressing the possibility that, in the absence of a political solution, companies in the U.K. that currently make use of passporting rights will not be able to service claims on existing EU policies after Brexit. As a contingency, a growing number of companies are exploring potentially expensive Part VII transfers of existing EU business to their newly created subsidiaries.”
The briefing states the rationale for domicile choice has been driven by the specific considerations of individual insurers, including proximity to clients and the ability to attract talent, as well as the local tax regime. The domestic regulator has also been important, particularly its approach, expertise and accessibility. However, the principal driver of domicile choice has been whether there is an existing operation, such as a branch, in a particular location.
Yvette Essen, director of research, said: “To date, Luxembourg and Ireland have emerged as the most popular locations for a new EU subsidiary. However, no single city appears likely to challenge the position of London as Europe’s principal (re)insurance hub. London is likely to remain one of the world’s leading insurance centres, supported by its pool of underwriting talent and access to related services.”
To access a complimentary copy of this briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=276577 .
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.