Technology, Brexit and regulation top recurring concerns for insurance, finds law firm Beachcroft
Brexit, technology and regulation lead the key concerns of insurers in the latter half of 2019, according to a report by law firm DAC Beachcroft.
The report said “there is a very long list of outstanding issues,” for insurers to resolve relating to Brexit.
“Firms are having to decide whether to transfer business, set up new branches or get a new licence,” found Beachcroft's report, Informed Insurance 2019/20.
“The widespread ignorance across the political spectrum about the impact Brexit could have on businesses has left firms with little option but to prepare for an abrupt, brutal and possibly chaotic ‘no deal’ exit, while hoping for something a little softer.”
“With other locations such as Paris, Frankfurt and Malta still working to attract firms, the final picture has still to emerge," explained Dr Alexandra von Westernhagen, a specialist in EU competition law at the firm. “There hasn’t been a clear winner. It shows that London is a launchpad that cannot be easily replaced.”
Bupa Global will be serving from Dublin customers in the European Economic Area (EEA) who have international private medical insurance. Luxembourg has been another popular choice for insurers, while Lloyd’s decision to pick Brussels as its new EU base has induced some London market firms to follow it there, said DAC Beachcroft. However, commentators have noted that the move to Dublin, a key destination for brokers, has created huge costs for those who trade internationally.
There are other issues that will need to be addressed, either before Brexit or in any transitional phase after the UK formally leaves the EU, the report added.
It said that even if the UK works hard to maintain equivalence with European regulation to make the transition easier, there are some regulations that have no equivalence regime. Among these is the recently implemented Insurance Distribution Directive (IDD).
Among technological issues insurers are facing is the anticipate growth in the use of driverless cars. The first priority is liability and the law firm poses the question 'when will the human driver be expected to respond to avert an accident and when will liability switch to the vehicle itself?'.
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