The government has released figures showing Brexit’s potential scale of disruption in the UK’s insurance industry as more than 2,700 brokers face the “significant” risk of losing access to the EU single market.
Lawmaker Andrew Tyrie, head of Parliament’s treasury select committee, recently revealed data from the Financial Conduct Authority which showed that 5,500 British-based financial firms rely on “passporting” rights to operate freely across the EU.
Of these UK firms, 2,758 are brokers which have been granted passports under the EU’s insurance mediation directive, which covers insurance intermediaries, the
Financial Times reported.
The next most common passport is the one granted to 2,250 companies in the areas of investment banking and capital markets and issued under the markets in financial instruments directive, the report added.
The figures also showed that 5,727 insurance intermediaries elsewhere in Europe depend on passporting rights to do business in Britain.
“These figures give us an initial idea of the effects of losing full access to the single market in financial services. The business put at risk could be significant,”
The Guardian quoted Tyrie as saying.
“Almost 5,500 UK firms are using passports to do business in Europe, and over 8,000 European firms are using passports to provide services in the UK,” he added.
He said the issue should be a high priority in the negotiations between the UK and EU.
“No doubt the hard grind of establishing what best protects UK interests is already under way,” Tyrie told
Bloomberg.
“This issue needs to be right at the top of the in-trays of the Chancellor, the Governor of the Bank of England, and the UK’s lead negotiators.”
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