ABI calls for Brexit transition plan to prevent insurer flight

Brexit The UK government must get an early agreement with its European partners on a high level transitional implementation period following Brexit or risk insurance companies leaving the country, ABI director general Huw Evans warns.

Speaking at Insurance Ireland’s INED Seminar 2016 in Dublin this afternoon, Evans will warn that without this commitment UK insurers most affected by Brexit could be forced to take decisions to leave the UK before a final Brexit deal is clear.

The ABI has agreed five key demands for a successful Brexit transition – securing a regulatory environment that is appropriate for the UK market; retaining the ability to passport out of and into the UK, a close mirroring of the EU data protection regime to avoid a quagmire of complexity around how personal and non-personal data is protected; an improved future migration policy that enables the employment of high-skilled professionals from both within and outside the EU and a strong focus on regulatory dialogue and international agreements in overseas financial services markets, especially in India and China.

The call comes as Labour has been pressing the Government to publish a more detailed plan for Brexit ahead of triggering Article 50. The Government has accepted it will publish more detail, but the extent of that further detail is as yet unknown.

Evans will say: “Underpinning our five key asks on Brexit is a sustained focus on the need for an implementation period which stretches from the end of the UK’s membership in 2019 to a period when the new relationship can be broadly established. 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.

“We call on the Government to make a clear commitment that it will seek an early agreement with our European partners on a high level transitional implementation period which will help avoid economic shocks to both the EU and UK. This is in both sides’ interest, 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.

“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.”