Membership of the EU guarantees British insurers the right to do business in 27 other countries on an equal footing. The UK gains from this arrangement, selling more in insurance and long-terms savings products to the rest of the EU than they sell to us. Ahead of the EU Referendum on June 23rd, the ABI is producing a series of blogs exploring the role of the EU in our industry in more detail.
Kevin Thompson, CEO, Insurance Ireland
Having started my insurance career in London in the late 80’s, and having spent 12 years there learning my trade before returning to Ireland with my family, all of whom were born in the UK, it is probably no surprise to learn I am following the Brexit debate closely from both a personal and insurance perspective.
As CEO of Insurance Ireland, it is the most topical issue when I talk to insurance companies based in Ireland serving the UK market or Irish Insurance professionals working in the UK.
The questions usually revolve around the potential opportunities or challenges that could arise should the decision be to leave. It is not just the industry discussing it, it is also the Regulator.
The recent macro financial review by the Central Bank of Ireland, who regulate the sector here, made the following observation in terms of the insurance trade between Ireland and the UK market: “A Brexit from the EU could have implications for insurance firms located in Ireland conducting business in the UK market, while the possible removal of UK competitors may benefit other firms operating in Ireland.”
However, in the footnote, as only footnotes can do, further clarity as to the meaning of this narrative was explained: “depending on the nature of the Brexit, if it were to occur, Irish insurers may face restrictions upon their ability to conduct cross-border business into the UK and, similarly, UK insurers operating in Ireland may face restrictions”.
A decision to leave and the shape of an alternative trading environment for insurance and the premium volumes puts all this at risk.
When you consider that “outward” and “inward” premium volumes written between Ireland and the UK in 2014 were €3.8 billion and €8.6 billion respectively, it seems an awful lot of uncertainty could be brought to these trading numbers depending on what a Brexit might or might not look like, if the choice on Thursday is to leave.
Such numbers are certain and can be built on for the mutual benefit of both the Irish and UK insurance markets under the current EU Insurance Directives.
A decision to leave and the shape of an alternative trading environment for insurance and the premium volumes puts all this at risk. This is why Taoiseach Enda Kenny has urged Irish citizens eligible to vote on Thursday, to vote to remain. As he says: “We trade around €1.2bn (£900m) of goods and services each week between our two countries. Anything that gets in the way of that flow of trade will add costs and be damaging.”
Enda Kenny has been clear in saying that of all the EU countries, Ireland is the most integrated with the UK and we believe it is in both the interest of the UK and Ireland that the UK remains in the EU, however, as with Insurance Ireland, there is the upmost respect for the will of the people.
Kevin Thompson is Chief Executive of Insurance Ireland