The Association of British Insurers (ABI) has warned that insurance firms may relocate operations from the UK if the government won’t pursue a deal with the European Union (EU) for a Brexit transition period.
Huw Evans, the trade body’s director general, said the government should make a “clear commitment” that it will seek an early agreement with EU counterparts on a “high level transitional implementation period” following the Brexit move.
Evans said the EU and UK will avoid economic shocks with a Brexit transition period in place. If the government fails to bargain for it, then insurers most affected by Brexit could be forced to decide to leave Britain even before a final Brexit deal is clear, Evans warned.
“Without such a commitment there is little incentive for insurers considering relocation to take a longer term view on whether to press ahead with a decision,” he said in a speech in Dublin.
Evans said seeking a Brexit transition stage “would not be a sign of negotiating weakness and is essential if we are to maximise the smooth running of the financial system after 2019.”
”Not only will this be a sensible way of delivering such a momentous change for both sides, if agreed early it provides the option for the firms most affected by Brexit not to take swift decisions in 2017 on scaling back UK operations,” he said.
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