Without a doubt, the UK’s departure from the European Union – whenever that’s going to happen – has opened a can of worms for the insurance industry… the London Market Group (LMG), however, is of the view that there may be trading opportunities to be had after Brexit, and it is working towards taking advantage of them.
“We believe that to make the most of these opportunities, we should move the conversation on insurance away from simple indemnity and focus on how the industry can support economic growth and resilience across the world,” stated SCOR’s EMEA (Europe, the Middle East, and Africa) Hub managing director Malcolm Newman, sponsor of the LMG workstream to create the right business environment.
“Insurance has a positive economic impact: a 1% rise in insurance penetration translates into a 13% reduction in uninsured losses, a 22% reduction in taxpayers’ contribution following a disaster, and increased investment equivalent to 2% of national GDP (gross domestic product).”
Newman said the LMG has the capability to play a critical role in supporting the economic development of countries by growing trade in existing markets and opening new ones. To this end, the trade body will be working with the British government on formal trade negotiations and dialogues as well as activity aimed at promoting the London Market.
“The LMG has identified a number of priority markets that it will seek to work on with the Treasury and the Department of International Trade,” elaborated Newman. “Some of this will clearly depend on the Brexit discussions which are currently ongoing, but we feel we can make progress now using many of the existing trade fora.
“Our target markets include the US, Switzerland, ASEAN (Association of Southeast Asian Nations), Latin America, and the MENA (Middle East and North Africa) countries. We would like the UK government to develop an approach to third countries that seeks to liberalise access to such markets.”
According to the trade body, its next steps include building a consensus regarding the requirements for the London Market in a potential new trading arrangement with Switzerland; ensuring that London Market issues are fed into the work of the UK-US Regulatory Working Group to maximise alignment with the US market; and endorsing the market’s value in key ASEAN economies.
“Using its embassies, consulates, and the many trade discussions and dialogues it is having, the UK government can also help London to promote insurance and support the message that it helps foster sustainable economic and social development,” added Newman.
