STATISTICS:

RVS Live: A.M.Best: Ireland, Luxembourg or Belgium, insurers' choices for European Offices, following Brexit

In the wake of the decision by the United Kingdom (UK) to leave the European Union (EU), insurers that access EU business through their UK companies have begun to unveil plans to establish additional subsidiaries, primarily in Ireland, Luxembourg or Belgium, according to an analysis presented by AM Best during Rendez-Vous de Septembre.

Following the "Brexit" vote in June 2016, insurers that do not have a subsidiary outside the UK have faced significant pressure to reassure their clients in the rest of the EU that they will continue to be able to provide insurance services. These insurers have had to balance the desire to demonstrate their continued support to EU policyholders with the need to limit unnecessary investments in establishing any kind of new operation before details of new trading arrangements between the UK and the EU emerge.

A.M. Best has analysed companies' announcements as they provide details of their contingency plans. In a new Best's Special Report - titled "Location, Location, Location - Insurers Unveil Choices for European Offices" -, A.M. Best notes a number of market participants have taken decisive action by announcing the formation of new EU subsidiaries in order to ensure there is no interruption to the insurance services they provide to European clients. A.M. Best's analysis over the past few months reveals that Ireland, Luxembourg and Belgium have been among the most popular domiciles. 

However, while these three domiciles are emerging as key locations, no single city necessarily features as a major European insurance hub. Considerations when selecting a location have included proximity to clients, the ability to attract talent, the existence of a branch in a particular location, as well as the local tax regime. A.M. Best expects that London will retain its status as one of the world's leading insurance centresand an important insurance hub.

The long-term impact on the UK insurance sector will be determined in the detail of the negociated trade deal that will come into effect following any transitional period. A consequence of the UK leaving the EU is that insurers domiciled within the UK will no longer be directly subject to Solvency II regulation. However, A.M. Best expects the UK to seek and be granted regulatory equivalence, particularly given that the PRA (Prudential Regulation Authority) - UK's financial regulator -, is considered to be a strong regulator that has been strict in its implementation of Solvency II.

Much uncertainty remains, with key issues surrounding Brexit such as the shape of future insurance regulation, how to maintain access to EU business and talent and, also, the potential transfer of business. The UK's decision to leave the EU has resulted in considerable uncertainty regarding the country's economy and, in the medium term, it could impact economic growth in the UK and the EU. Furthermore, any economic downturn could have a negative effect on insurers' premium volumes due to a reduction in demand for both life and non-life insurance.

Follow XPRIMM Publications on LinkedIn, for more data on the insurance and financial industry.

Share |

Related articles

LIVE from Monte Carlo: The 62nd edition of the "Rendez-Vous de Septembre"

The 62nd edition of the "Rendez-Vous de Septembre", the annual traditional meeting of reinsurers starts Sunday in Monte Carlo. XPRIMM Publications covering the CEE, SEE and CIS insurance markets are available at the XPRIMM stand in Fairmont Hotel, as well as at the most important venues in Monte Carlo.

2018-09-13

ICAR 2018 registrations opened; top professionals in the fields of re/insurance, claims adjusting, risks modelling on the speakers list

"Various macro trends keep manifesting themselves: the digital age, longevity, ecological breakdown and increased protectionism are some of the key topics. While these changes can threat an established business model, macro trends can also be used to widen a commercial playground and explore different fields of profit," says Angelika WERNER, Expert Atmospheric Perils, Property Underwriting EMEA, Swiss Re.

2018-09-13

PERILS takes over CRESTA secretariat

PERILS, the independent Zurich-based organization providing industrywide catastrophe insurance data, has announced that it has taken over responsibility for the ongoing management of the CRESTA Secretariat. The Secretariat was previously managed on a rotational basis by Munich Re and Swiss Re.

2018-09-11

ON THE MOVE

TOP EVENT

photodune-3834701-laughing-girl-xs

LIVE from Monte Carlo: The 62nd edition of the "Rendez-Vous de Septembre"

The 62nd edition of the "Rendez-Vous de Septembre", the annual traditional meeting of reinsurers starts Sunday in Monte Carlo. XPRIMM Publications covering the CEE, SEE and CIS insurance markets are available at the XPRIMM stand in Fairmont Hotel, as well as at the most important venues in Monte Carlo.

13.09.2018

Willis Re - Market still soft, but functional

Despite the high losses from 2017 the reinsurance market is still soft, James KENT, Global Chief Executive Officer (CEO) of Willis Re stated at a press briefing in Monte Carlo.

10.09.2018

AIR launches severe thunderstorm model

Catastrophe risk modeling firm AIR Worldwide released a new severe thunderstorm model for Europe. Together with AIR's Extratropical Cyclone Model for Europe and European flood models, this new model now allows for a comprehensive assessment of atmospheric risk in this region.

10.09.2018

See all