On September 18, 2014 Scotland will hold a referendum on whether Scotland should be independent. British, qualifying Commonwealth and EU citizens who are resident in Scotland and aged 16 or over on September 18 will be entitled to vote in the referendum. The vote will also extend to service personnel serving in the UK or overseas in the Armed Forces and entitled to vote.

Although a ‘yes’ vote would not legally require the UK government to recognise Scottish independence, it would clearly be a very difficult position politically, if the UK government were not to then work with the Scottish government towards a negotiated independence.

How might independence influence insurance business in Scotland?

Currently, the UK has a successful domestic market for financial services including banking, insurance, asset management and other financial services. Scotland shares a significant proportion of this UK domestic market and has an international reputation for its skills in banking and finance. Indeed, some of the UK’s most well-known financial services brands began their life in Scotland and over £300 billion of funds are managed in Scotland. In 2010 financial services and insurance contributed £8.8 billion towards Scotland’s economy, accounting for more than 8 per cent of Scotland’s onshore activity. Furthermore, 24 per cent of employment in the UK life and pensions sector is based in Scotland.

Should Scotland vote ‘yes’ on September 18, what might we expect to happen to the insurance sector in the UK? Read our Insurance Q&A on Scottish independence