Several large UK insurers have reportedly claimed they have contingency plans in place should Brexit happen without a deal between the UK and the EU.
The Financial Times contacted 20 large insurers, and most said they would still be able to pay claims regardless of the outcome of talks. For example, Admiral, AIG, Hiscox, and RSA told the paper they will pay through a Part VII transfer – in which policies with EU clients are moved to a new or existing subsidiary elsewhere in the EU. This can take as long as 18 months and fees can cost up to £1 million for the largest transfers.
Meanwhile, the publication reported that other insurers have turned their UK-based companies into societas Europaea (SE) firms can more easily transfer or merge with companies in other EU member states. According to The Financial Times, such insurers include Chubb, Liberty Specialty Markets and the UK operations of Japan’s Mitsui Sumitomo.
Brexit secretary Dominic Raab revealed last week the government is planning for a no deal-Brexit, saying it has a responsibility to prepare for every possible outcome.
“For two years, the government has been implementing a significant programme of work to ensure the UK will be ready from day one in all scenarios, including a potential ‘no deal’ outcome in March 2019,” said the government's technical notice.
The insurance sector has warned against a no deal-Brexit, as it believes the scenario would cause major inconvenience to “millions” of pensioners, travellers, and drivers.
“We urge the government to agree a deal as a matter of urgency,” said Association of British Insurers (ABI) director of regulation Hugh Savill. “Insurers have, of course, been making contingency plans for their own operations for many months now, but this contract issue is not one that insurers themselves can fix.”
