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Brexit confusion threatens UK insurance brokers

Brexit confusion threatens UK insurance brokers

The lack of a clear agreement on cross-border trade following Brexit could pose a ‘serious threat’ to the business models of thousands of UK insurance brokers.

The UK currently holds number one position in the European insurance market, with £7.8bn in European revenues – but, according to the British Insurance Brokers’ Association (Biba), this has been put at risk by the decision to exit the European Union.

Some 2,758 brokers possess passports to trade in the European Union, and Biba is calling for mutual tariff-free access to ensure UK jobs are protected.

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The trade body’s intervention came as Prime Minister Theresa May today (29 March) began the process of leaving the European Union by triggering Article 50 of the Lisbon Treaty in a letter to the president of the European Council.

Biba’s chief executive Steve White said: “The UK’s number one position in the European insurance market and the business model of nearly three thousand UK firms is under serious threat if we do not have barrier-free, tariff-free access to the EU market including some form of passporting model and regulatory equivalence. 

“Therefore, as Theresa May invokes Article 50 we call on her to deliver what she stated in her Lancaster House speech - the greatest possible access to the EU through a bold free trade agreement.”

Mr White also pointed out the UK is viewed as the gateway to Europe by firms in the US and other countries, underlining the importance of finding a sector-specific solution for cross-border services.

In its 2017 Manifesto on EU exit issues Biba additionally called for solutions regarding the use of ‘green cards’ for motor insurance; the use of the European Health Insurance Card (EHIC) connected with travel insurance; and changes to the motor insurance market following the Vnuk case.

Clive Waller, managing director at CWC Research, said: “The UK retail financial services sector is regarded as a world leader, and rightly so. However, we do not live in isolation. We are a small part of a far, far bigger financial services industry. 

“Every major bank, asset manager, insurance broker and benefit consultant has a major office in London. This is partly due to the expertise we have, due to time zones and due to the English language. It is also due to the fact that we are seen as the gateway to Europe. 

“Unless we have access to Europe with passporting rights, we will lose reputation, we will cease to be the favoured global location for bright people, we will cease to be the favoured technology hub that we currently are and much, much more. 

“Those who have the responsibility for negotiating our post-Brexit deal do not have specialist City knowledge.

"Not one of the leaders in negotiation has a passion for the City. It is crucial that the government appreciates the importance of this industry to UK Ltd both for jobs and for contribution to our economy.”