Insurers are cautious about making significant further investment in their preparations for UK entry to Economic and Monetary Union (EMU) in advance of further clarity on the UK position. This is the message from a joint ABI/Ernst & Young survey released today.

The survey, which covered 100 insurance companies, representing £100 billion of premium income (over 80% of the UK insurance market), showed that:

• a positive commitment to UK entry is now overwhelmingly cited as the most important trigger for insurance companies to start making significant investment;
  
  
• until then, most insurers are going no further than an initial assessment phase of work for UK entry.

Overall, the results indicate that UK insurers recognise both the complexity of operational implications and the cost of preparation. The majority of respondents (60%) regard the euro as having a neutral effect upon their businesses, but see the implications of dual display, rounding and contract conversion as complex. An overwhelming majority (95%) favour industry guidelines in these areas

This last result supports the contingency work which the ABI has been co-ordinating, to produce guidelines for insurance companies on how these more complex issues should be addressed.

Notes

1. A questionnaire was issued to the ABI membership in October 1999. This was the second annual survey of UK insurers’ contingency preparations for the single currency. Ernst & Young worked with the ABI to carry out the research programme and produce the report.



2. A report giving fuller details of the results of the survey is available on request.



3. Enquiries to:
   

   Malcolm Tarling, ABI 020 7216 7410 (Home: 020 8297 9510)
   Chris Smith, ABI 020 7216 7417
   Peter Havelock, Ernst & Young 020 7951 5069
   David Parrish, Ernst & Young 020 7951 4229 (Mobile: 07771 837331)




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