Brexit Will Hit Insurance Premium

Overall premium income for the London company market in 2016 was £22.725 billion, a new report by the International Underwriting Association has revealed.

Gross premium written in London totalled £16.034bn, while a further £6.691bn was identified as written in other locations, but overseen and managed by London operations.

The IUA’s London Company Market Statistics Report 2017 also analyses income earned by branch operations in the London Market likely to be directly impacted by Brexit.

£7.383 billion is currently underwritten via such business models which face a change in their regulatory status as the UK leaves the European Union.

In addition £1.554bn of income from Europe is earned by London Market companies that are either UK headquartered or subsidiaries of parent companies in a third country outside of Europe.

Dave Matcham, IUA CEO. “One of the most important outstanding Brexit questions for the London company market concerns the status of operations currently conducting business in the city as branches of either a continental European parent company or of a European subsidiary and with a parent elsewhere. These are popular business models and, without any transitional arrangements or a new trading agreement, their status must change. The Prudential Regulation Authority will need to supervise them either as subsidiaries or as third country branches. Any adjustment to a new framework will, of course, occupy time and resources and the process for change should, therefore, be laid out as soon as possible in order to provide a degree of stability and certainty.At the same time there is a significant amount of European premium currently underwritten by subsidiaries and UK domiciled firms under the EU’s financial services passport regime. Our survey clearly demonstrates the interconnected and mutually supportive nature of insurance business across the UK and other EU member states.”

BREXIT & Insurance News

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