ABI and Swiss Re warn of Brexit threat to London at Fitch event
Though much has been done to ensure a smooth Brexit transition for the UK insurance sector, leaders in the industry warned that EU subsidiaries could take business from London “very quickly” after Brexit.
Speaking in a panel discussion at the Fitch Ratings Insurance Roadshow in London on Thursday, Olga Tschekassin, economist at Swiss Re, noted that many UK businesses had set up branches as subsidiaries in the EU, which “in general is great for preparation” ahead of the Brexit deadline on March 29.
“But,” she said, “what does it mean for the market and in the future? UK or EU business that has been written out of the UK [has] moved to the EU branches. If you think about how much effort companies have put into setting up the branches it is very difficult to imagine, even if we get a close alignment with the EU, that those branches will not take over the EU business [as well as the UK work].”
UK insurance businesses have been working to minimise the disruption to clients in the last two years and will continue to do, said Huw Evans, director general of the Association of British Insurers. But he questioned whether the UK could remain as central as it has been in the global insurance market.
“Most of these [EU] subsidiaries are there to ensure disruption to customers is minimised and have taken huge amounts of investment to set up over the past two years, they will develop a life of their own. They will be fully staffed and the people will live there and naturally they will want to make a success of it,” he said.
Evans went on to suggest that it will sap business away from London “very quickly”.
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