Brexit: Brokering a deal
Graeme Trudgill is Executive Director and a member of the main board at the British Insurance Brokers’ Association (BIBA).
Graeme Trudgill is the Executive Director and a member of the main board at the British Insurance Brokers’ Association (BIBA). He is a Fellow of the Chartered Insurance Institute and joined BIBA in 2001 following senior roles as an insurance broker. Graeme leads BIBA’s Corporate Affairs, authoring BIBA’s Manifesto along with working closely with members and advisory boards on representation, government engagement, and broker promotion.
MIM: What does ‘Get Brexit done’ mean to the insurance sector?
GT: Brexit means very different things to very different firms in the insurance sector, some brokers have raised concerns that the removal of passporting is a significant problem for them in continuing with access to their EU clients where they have not established a physical presence in the EU. Other firms may have no EU clients, do not use EU capacity and are far less concerned.
MIM: Post-Brexit, will the EU Single Market still be important to UK brokers?
GT: Yes! When the UK leaves the EU, our members want a future trading agreement to be put in place with the EU that provides frictionless trade for the full range of financial services. Providing brokers with the ability to continue to exercise something akin to their current freedoms to service clients and risks which are domiciled in the EU without the need for a physical presence and local authorisation would be the solution that affected brokers are seeking.
When the UK leaves the EU, our members want a future trading agreement to be put in place with the EU that provides frictionless trade for the full range of financial services.
MIM: How does the UK insurance sector view the possibility of a no-deal scenario?
GT: Many of our brokers are very concerned, some business models have been built and are established around passporting. Many annual contracts are being issued right now then will run into 2021 when the proposed transition period is due to expire. There are also issues around longer-term policies like legal indemnity insurance. If future access to EU customers or risks is to be based on the existing equivalency provisions, it would be a ‘no use to us deal’ as far as brokers are concerned, as it would have the same effect as a ‘no deal’.
“If future access to EU customers or risks is to be based on the existing equivalency provisions, it would be a ‘no use to us deal’ as far as brokers are concerned, as it would have the same effect as a ‘no deal’”
MIM: Has the UK insurance industry been adequately consulted/involved in the protracted negotiations?
GT: BIBA has been very active in outlining our concerns from the very start to Theresa May when she was Prime Minister, to Boris Johnson subsequently as well as the City Minister and all the relevant officials across Whitehall. Our Manifesto clearly outlines our concerns.
“BIBA has been very active in outlining our concerns from the very start to Theresa May when she was Prime Minister, to Boris Johnson subsequently as well as the City Minister and all the relevant officials across Whitehall”
MIM: Owing to the level of regulation and interconnection between the UK and EU financial systems, what’s the risk of policies signed pre-Brexit becoming invalid?
GT: There is a risk – that we have flagged with officials, it is a hot topic for discussion at our Brexit committee, the transition period is very short and ideally we would like any new deal to dovetail with the expiration of any transition period. Preparing for a no-deal scenario at the end of January 2020, a few (but not all) EU countries made provision for run-off periods (all for different lengths of time), so the extent of the risk varied by the member state.
MIM: Alternate Swiss and Norwegian models demonstrate good examples of operating in Europe but out of the EU, will the UK be able to create a bespoke model?
GT: It is certainly our wish that the Government succeeds in signing a bespoke new trade agreement that covers the full range of financial services. Many column inches have been written about the pros and cons of both the Norwegian and Swiss models, so a bespoke deal needs to be the aspiration.
ENDS
