Chartered Insurance Institute calls for more clarity from Prime Minister Theresa May
As Prime Minister Theresa May is set to announce more detail on preparations for Brexit negotiations in her keynote speech today, the Chartered Insurance Institute (CII) has urged the Government to make an early commitment to transitional arrangements following the UK’s departure from the EU.
New research from the CII Member Economic outlook and Brexit survey has shown that economic and business confidence across the insurance and financial planning profession has plummeted to its lowest levels since 2011. The optimism in the UK economy that had been building in recent years has fallen off a ‘cliff edge’ to provide the greatest one-year fall since records were first collected by the CII.
Almost half (48 percent) of those working in insurance expect the UK economy to deteriorate over the next 12 months, nearly ten times higher than a year ago (5 percent). Historically, the index has been much less volatile and so today’s research represents a significant change in confidence.
Within the insurance profession, those working in the Lloyd’s market are the least optimistic about the year ahead. Over a third (37 percent) expect the economic situation to worsen and only a fifth (20 percent) think it will improve (GI market: 20 percent and 33 percent respectively).
The research revealed that those working in the London market were the least likely to have voted to leave the EU and value the benefits of the single market. In fact, the vast majority (92 percent) believe that passporting rights should be a top priority in the Brexit negotiations for a smooth transition.
While there may be differences in opinion between the sub-sectors of the insurance profession, there is widespread unease about what will happen to the British economy following Brexit.
Nearly half (45 percent) of the CII’s membership say they are concerned that the insurance and financial planning sector will not be well represented in negotiations, which will have a detrimental impact on both the profession and its customers. All of those surveyed agreed that securing economic certainty for future planning was the most important element of the Brexit negotiations above all other issues.
Keith Richards, managing director of engagement at the CII, said: “We call on Theresa May today to make an early commitment to a transition arrangement to bridge the transfer from the UK’s membership of the EU to its new trading relationship outside of the bloc. This commitment and clarity will help alleviate this uncertainty and provide the conditions for as much business continuity as possible for the sector.
“The insurance profession cannot adopt a ‘wait and see’ approach to the UK’s future relationship with the EU indefinitely. Publishing specific proposals regarding what form transitional arrangements should take before beginning negotiations, and to make obtaining them an early and important objective once negotiations have commenced, would discourage businesses from pre-emptively making changes based on a ‘worst-case’ scenario. We have major concerns over what the impact of this uncertainty could mean for the consumer and urge the government to make an early commitment to a transition arrangement.”
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