3. Market developments
UK: London Market Group publishes its recommendations to the UK Government for its Brexit negotiations
The London Market Group (LMG) is creating a taskforce group to work with the Government in its Brexit negotiations for a trade deal for the insurance industry.
The Brexit Roadmap highlights three key objectives it recommends the Government considers in its negotiations:
- A guarantee that the London Insurance Market will have regulatory equivalence with the EU under Solvency II. This would not give market access rights to the EU for UK insurers and reinsurers, but it is important that the UK and EU prudential regulatory regimes remain comparable.
- A new trade deal to allow for continued cross-border activity between UK and EU insurers, reinsurers and brokers.
- At the outset of negotiations it is important to agree an implementation period to move to the new trade agreement. During this time the industry’s current market access rights would be maintained. This is crucial to avoid uncertainty on the day the UK leaves the EU, and to allay concerns and uncertainty over whether insurance policies will be enforceable.
More than £6 billion of international business is written in London by carriers with a parent company or principal base located elsewhere in the EU, and more than £8 billion of premium is brought to the London Insurance Market each year, by brokers on behalf of EU customers. It is therefore hoped that companies may choose not to make Brexit contingency plans and open offices outside of the UK, if they are reassured that European business will be maintained for UK insurers.