The Association of British Insurers warned on Monday that if Britain leaves the European Union without a deal it could cause long-lasting damage to the UK insurance industry.
A no-deal Brexit could result in British insurers having to hold more capital than they need, damaging competitiveness, reducing investment in the economy and see people get less from their pension, Huw Evans, Director General of the ABI, said in a statement ahead of the trade body’s annual dinner in London.
“Any future arrangement with the EU that required the UK to comply with rules it had no say over could be weaponised by those in the EU that want to damage the UK,” Evans warned.
“… It would be naive to think that over the course of the next few decades, EU rules will do anything other than reflect the interests of its members, not its former members, seeking to draw capital, talent and market infrastructure into the EU27.”
The UK is the largest insurance market in Europe, the fourth largest in the world and employs over 300,000 people in Britain.
Evans said World Trade Organisation rules, which would replace those from the trading bloc in the event of a no deal Brexit, do not guarantee market access for the services which make up four fifths of the UK economy.
“This matters because the EU is – by a very long distance – the largest export market for the UK insurance and long-term savings industry,” he added.
Britain’s government is considering different options, including possibly delaying Brexit, if parliament fails to approve Prime Minister Theresa May’s deal by March 12.
Evans said Britain’s insurers have transferred about 29 million insurance contracts and set up about 40 new hubs in the EU to minimise Brexit disruption to customers.
Several insurers are transferring policies of EU based customers to new hubs in the bloc, though Lloyd’s of London won’t complete the transfer of business to its new Brussels subsidiary before March 29.
“As a last resort, if the only alternative to no deal is some form of short delay to Brexit, then delay we should,” he added.