T he UK leaving the European Union is quite a big thing for many Insurance Companies and Brokers (as well as other Financial companies such as Banks and investment firms) both in the UK and in Europe.
Thousands of companies across the 28 members of the EU and Norway, have what are called passporting rights, which essentially means they can conduct business freely within other EEA countries or states without having to have a separate company in each country they wish to operate in.
The Government has just announced that the UK will be taking the ‘hard Brexit’ approach option which will include leaving the single market. This means those UK companies operating in the EU and EU companies working in the UK will lose their passporting rights as things stand.
There is already a precedent in Europe of Switzerland who operate within the EU without being a full member of the EU but the Swiss companies have to go through channel of having head offices in other countries to operate.
London however is one of the two main global financial centres in the world and has strong regulation and currently meets EU requirements and is often superior to most EU members. The hope will be they try and maintain a similar level of access as current in order to avoid disruption across Europe.
Unfortunately, there will be some countries who will want to use this as an opportunity to seize the financial importance away from the UK and retain it within the EU. This could have a negative impact on our economy especially since the Financial services is a net exporting industry – in other words the UK exports more Financial Services than it imports!
Failure for the UK to maintain a similar agreement on passporting rights would most likely have a negative impact on the economy.
Motor Increases and EU Madness
Recent figures from a Confused.com/ Willis Towers Watson survey suggests there has been a 14% rise in motor premiums over the last year the Insurance Times reported.
With reasons for the increases including, competition, low interest rates, a continuous rise in spurious cash for crash and whiplash claims. Now there is another ruling from the EU that will lead to at least a short term increase in motor premiums.
Currently the Motor Insurers Bureau has a £10 levy on insurance premiums you pay to help cover insured drivers who suffer a claim due to an uninsured driver.
A new EU ruling now states if an uninsured driver causes a loss to another uninsured driver that driver will now receive compensation.
Chris Grayling the Transport Secretary stated “It cannot be right that hardworking law abiding drivers will foot the bill for the irresponsible actions of those who decide to break the law and drive without insurance”. He further advised that the UK will scrap the ruling after leaving the EU.
This information was supplied by Bill Imber BSC (Hons), Cert C.I.I., G M Imber & Sons Ltd., Insurance Brokers, phone 01342 327250, who specialises in insurances for the Retail, Crafts and Market Trading Industries.