12 September 2015 Insurance

Leaving EU ‘would damage London Market’s reputation’

In a recent survey by Intelligent Insurer, 70 percent of respondents said that a UK referendum in favour of leaving the European Union (EU) would damage London’s role as a global hub for re/insurance and risk transfer. “It would have a negative impact on the willingness of London to deal with European clients,” said one respondent.

Another added: “It would encourage parochialism and local interest within the EU and a lessening of common legal structures and rights.”

Many others felt strongly about the detrimental impact of leaving the UK, for reasons such as some EU members relying on a re/insurance market inside the EU rather than on a non-member’s capabilities and an increase in ‘paperwork’.

“London is already under pressure from local ‘hubs’ around the world. By leaving the EU, a further negative light could be projected onto the London market. This would need to be addressed in addition to the concerns already highlighted in the recent London Matters report. This, in turn, could detract focus from such previously identified issues,” said one person.

Another said: “Lloyd’s and the London Market is developed on the basis of reputation.

Leaving the EU would encourage Dublin, Paris, Lisbon, Berlin, etc, to ‘take on’ the UK and marketing would include common currency, legislation, and language.”

However, 30 percent did not agree.

“Reinsurance always has been and always will be a global commodity driven by the needs and requirements of buyers and providers—there will be instances where reinsurers may need and/or choose to set up branch operations in Europe (if they don’t have them already) in order to comply with certain European regulators that have interpreted the EU reinsurance protocol differently from other EU countries,” said one respondent.

Another added: “Allowing the UK to manage its own economic policy more comprehensively will allow the government to more effectively dictate the terms it offers to all business sectors.”

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