What will the future of financial services look like in a post-Brexit world? The London Market Group believes it may have the answer.
The group has launched a paper which outlines an “ambitious approach” to free trade across financial services, using the UK-Switzerland trade discussions as a template.
It is asking the Government to look at whether the PRA could authorise Swiss activity in the UK with a “light touch branch” model – this would see Swiss firms write global risks in the UK, meaning there would be no need for them to gain formal authorisation for a branch, instead simply making a notification to the regulator.
Crucially, the branch would apply to global risks only – it would not be used for UK risks or UK policyholders. It would simply allow for contracts to be signed in the UK on behalf of the Swiss parent insurance company, while the balance sheet would remain in Switzerland.
According to Malcolm Newman, sponsor of the Government workstream, the upcoming negotiations present an opportunity that should not be missed.
“Cross-border exchange between Swiss (re)insurers and the UK to a large degree focuses on the non-life and wholesale insurance markets and we believe that more can be done to enhance the trading relationship with Switzerland,” he said.
“Such an arrangement would provide Swiss insurers with greater access to London’s international ecosystem and bring them closer to the global risks written in the world’s largest specialty market. Swiss firms could use this opportunity to expand their underwriting capabilities in the UK, to take full advantage of being part of London’s global market. The arrangement would allow their underwriters to be closer to the UK broker and give them greater access to the London Market eco-system.”
