Brexit Debate: How will Brexit Affect the Insurance Industry?

Almost two thirds of insurance professionals have admitted to a crisis of confidence over Britain’s membership of the EU, with 61% of industry employees testifying a ‘loss of faith’ in the European Union. Despite this, 62% of the same industry professionals believe that total divorce from the European Union would be too drastic a solution. What is more, 68% think leaving the EU would harm the London insurance market. 

The results were gathered at a debate event entitled “Brexit: Dawn of a new era or the beginning of the end for the UK insurance sector” by Moore Stephens on 8 June. The seminar was held at Balls Brothers and attracted over 140 attendees. Snap polls of attendees offer an insight into the view of professionals across the industry – from brokers and underwriters, to other industry advisors. 

The two speakers on each side gave compelling arguments for their viewpoints. Mark Field, the MP for London and Westminster teamed up with Marcus Booth, Partner at White & Case to put the case for remaining in the EU. They were opposing Kwasi Kwarteng, the MP for Spelthorne and Redvers Cunningham, the Chairman of UKIP, Spelthorne (and Director of Thomas Miller Professions) arguing to leave. The debate was expertly chaired by Mark Geoghegan The Editor –in-Chief of the Insurance Insider who posed a number of interesting questions to the audience throughout the proceedings.  

Issues touched upon included “Project Fear” and whether it is a valid argument of the stay campaign; the flexibility of our role within the EU and how it relates to legislation; and the mass loss of confidence in the European Union and its need for reform.

One of the most prominent topics of the conversation, however, was the impact that leaving or staying would have on both trading and the future of the financial industry in London; and the risks attached either way. Due to the nature of the largely insurance-based audience, this was a big concern of the majority of those present.

The industry appears to agree on the need to roll back the level of EU regulation. Event polls reveal that 71% of seminar attendees believe that too much regulation that remains out of their control stems from the EU. 

Paul Latarche, Head of Insurance Sector Group at Moore Stephens, commented on the results:  
“The looming EU referendum has generated heated debate across the UK and in the insurance industry, which was aptly reflected throughout our Brexit seminar. The insurance industry is evidently deeply conflicted about the future of Europe; however there seems to be a strong belief that a Brexit would negatively affect the UK insurance market.

“It seems unlikely, however, that Brexit would spell regulatory bliss for insurers. A wholesale rollback of regulatory pressures originating from the EU after a ‘leave’ vote is unlikely. For instance, major European-level initiatives such as Solvency II have already been incorporated into UK law. Ultimately, though, it seems clear that whilst industry professionals may have lost faith in the EU, they are united on acknowledged the negative effects of a possible Brexit.”