Insurance brokers on the hook for Brexit deal
Insurance intermediaries need to make contingency plans due to Brexit to protect interests of their clients, secure contract continuity and to enable that business continues flowing into London, the London and International Insurance Brokers’ Association (LIIBA) has warned.
“The spotlight so far has been on the decisions of underwriting firms as to how they will navigate a post-Brexit marketplace,” said LIIBA CEO Christopher Croft (picture left). “However, the broking industry also faces major challenges and we are working closely with members to help them make the right contingency plan to protect the interests of their clients. That may require them to create a subsidiary entity in the EU,” Croft noted.
A report produced by LIIBA in conjunction with EY wants to help intermediaries to deal with the significant uncertainty surrounding their ability to place and service European risk from the UK post-Brexit. The report also aims at helping intermediaries to choose the most appropriate location for an EU entity.
“We all know that there needs to be a solution found for contract continuity – so that clients with policies in play as the UK leaves the EU are not disadvantaged,” Croft said. “We support the call from the CEO of the FCA for a single, official solution to this rather than leaving firms to fend for themselves. But we also need to ensure that the flow of business into London can continue whatever the outcome of the negotiations. This report will support our members' plans to achieve that.”
Benedict Reid, UK Insurance Brexit Leader for EY, added: “Brokers have a fundamental role to play to maintain client service and insurance trade flows between the EU27 and the UK post-Brexit. This should be front of mind for brokers. It is essential that Brexit plans are connected across the entire value chain – from client to broker to insurer and reinsurer – to avoid a situation where business cannot be placed with newly-authorised underwriting entities. If brokers do not move with pace, they risk not being ready to trade with underwriters’ new entities, which could result in disruption to their clients, their trading partners and their own businesses.
“As underwriting firms continue to develop their Brexit plans, brokers should expect significant volumes of communication which will enable them to align with new models, and for their clients to be transferred to a new European or UK legal entity if required. Time is now very short for those brokers who need to develop their plans for authorisation to continue trading cross-border with the EU27.”
Join us at Intelligent Automation in Insurance - London 2018. Book by Feb 28th and you could save £300.
More of today's news
Lancashire combined ratio jumps to 125% in 2017
JLT Re North America taps cyber/E&O leader from Zurich
Bermuda’s MultiStrat completes casualty-linked securities deal with Storm Harbour Partners
North America non-cat programmes renew flat to +5%
NN Group, Delta Lloyd merger delivers €133m savings in 2017
