Keep calm and carry on as Brexit clock ticks
By invoking the EU’s Article 50 exit clause, the Brexit process has begun. Regardless of how you voted, it’s time to keep calm and carry on.
By invoking the EU’s Article 50 exit clause, the Brexit process has begun. Regardless if you voted to remain or to leave the EU, it’s time for everyone in the financial services to keep calm and carry on. Let’s ignore the prophets of doom and make the best of this situation.
For every crisis there is an opportunity, and there is no need for the UK’s financial services sector to talk itself into a self-inflicted recession because that’s the last thing anyone needs.
Insurers, as major institutional investors and financial institutions that take a long-term view, have a vital role to play in acting swiftly and decisively to safeguard jobs and work with politicians to ensure UK insurers get the best deal possible under Brexit.
What is needed at insurers and all financial institutions is leadership now and cool heads. That’s why it’s great to hear the insurance industry stressing that insurers’ planning process for Britain’s EU exit is ‘well underway’.
Jim Bichard, UK insurance leader at PwC, said: “The triggering of Article 50 is an important moment for the UK insurance market and for all insurers operating in the UK, Europe and further afield.
“London is a global centre for insurance and the negotiations over the coming months will be particularly relevant for this industry. Many insurers have used the months following the referendum to make plans and we will start to see these come to fruition in the coming months.”
The Association of British Insurers (ABI) has identified eight priority markets in the race to make the most out of new trade opportunities following Brexit.
China and India were identified as the top two priority markets for UK insurers, with a gradual approach needed to secure improvements in the ease of doing business there.
A further six countries have been identified where ABI members are already active and there is high potential for progress and growth:
- Hong Kong (SAR)
- South Korea
The markets highlighted form part of an industry paper submitted by the ABI to Government that also underline the main practices that need to be addressed in these markets if insurers are to expand further
The paper also identifies some of the key protectionist or discriminatory practices that need to be addressed if UK insurers are to grow their presence in these markets. They include:
- Getting in place workable rules on investment, such as whether foreign insurers can set up subsidiaries or branches overseas;
- Easing restrictions on Foreign Direct Investment, or limits on equity stakes in domestic insurers;
- Tackling discriminatory measures, such as reinsurance collateral requirements;
- Ensuring UK holding companies of international companies can carry out financial functions such as lending money to overseas subsidiaries, subscribing for shares in overseas subsidiaries, and receiving repayments, distributions and other returns of value back to the UK from overseas;
- Addressing barriers to moving skilled people into overseas markets
Let’s make Brexit work and do so in a spirit of cooperation and shared friendship with our European neighbours and partners.