Following a general election result that many did not see coming,
one insurer last week said the UK faced a further period of uncertainty. Now, a global law firm has weighed in on the election, which it says has come at a “critical time” for the insurance industry, and urged the government to keep several key insurance issues at the top of the pile.
“A series of major reforms to legislation affecting claims awards have been set in motion, including around whiplash, driverless cars and the Ogden discount rate, but now questions must be asked about the government’s will – and, indeed, ability – to see them through,” Mark Hemsted, partner at Clyde & Co, where he acts on behalf of a number of insurers, said in a statement to Insurance Business.
After former Justice Secretary Liz Truss got the boot in a cabinet reshuffle yesterday, Hemsted said he was hopeful that her replacement would “keep these reviews firmly front of mind.”
“While the whiplash reforms were better received by the industry than the results of the discount rate review, both were subject to further consultation,” he explained. “The industry certainly had high hopes of softening the impact [of] the discount rate changes, but these may be lessened by the simple fact that this new government is going to be distracted by Brexit and the machinations of Westminster. We urge the government to return to these important issues as a matter of urgency.”
With government support, the UK has been able to establish itself as a leader in the development of autonomous technologies for motor vehicles and other forms of transport, he said, adding that it would be disappointing if that were to be “eroded by political indecision and a decline in business confidence.”
“In our view, if the UK is to make a success of Brexit, the government cannot afford to detach from business and fail to deliver the leadership and the legislation on which industries depend,” Hemsted said. “In insurance in particular, the UK is a world leader, but global competition is snapping at our heels so we have no time to waste.”
And while a hung parliament isn't something that businesses ever wish for, insurers are “probably ahead of the game on the biggest issue of the day, Brexit,” Ivor Edwards, partner at Clyde & Co and European head of its corporate insurance group, commented.
“[Insurers] haven’t waited and are busy setting up carrier companies in other EU jurisdictions to be sure that they’re not affected, whatever the outcome of negotiations,” he explained. “Access to skills and talent is probably the one thing that the insurance industry might be more optimistic about following the election. The rhetoric around curbing immigration seems to be softening, which is important for the whole of the City of London, not least insurers.”
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