ABI director general says the government had a “slow start” to Brexit negotiations but praised the industry’s determination to ensure a productive future
ABI director general, Huw Evans has praised the industry for how quickly it got to work after the EU referendum, but says the government had a slow start and has ”a lot of work still to do to ensure future relationships stay intact.”
Speaking to Insurance Times, Evans says the industry got to work straight away after the June 2016 result came out.
“I think the government had a slow start because it hasn’t done any contingency planning for the result of the referendum that we actually got. So, I don’t think anyone would argue that the government has to start from scratch in terms of the Brexit process, and has spent too much time arguing amongst itself and not enough time reaching agreed positions early enough to get discussions going with the European Union.
”However, I think firms, insurance firms, in particular, have worked very hard, pretty much since the day after the referendum, to try and put in place pragmatic solutions that enable them to meet their customers needs, and our advice consistently to firms has been, don’t wait for a political process to solve your problems. Do whatever you can within your own power to provide… do what you need to do to provide continuity for your business after we leave the European Union, and I think firms have worked very hard to put those plans in place.”
He then said all their efforts needed to be backed up by legislation.
Evans described his delight at the transition period deal which has been agreed.
”We were so keen to see the transition period. We’ve been arguing for it since September 2016, because we could see this cliff edge looming.”
Being in April, if any insurance policy was written, it would straddle the Brexit deadline in March 2019. But with the transition period, those policies will still be valid, whereas before, there was uncertainty.
Evans continued: “We were very pleased that at the very least, that avoids the uncertainty for customers and it means that insurers can carry on writing those annual contracts now, knowing that to all intents and purposes, we are still part of the EU for the purposes of policy fulfilment.
But it still leaves 2021, when the transition period is over and no deal has yet been agreed past the period. Evans expressed concern at this, stating that he simply doesn’t know if a deal will be made in time, saying it is “too early to say.”
Companies to pull out?
In March, MCE Insurance pulled out of Ireland, reportedly due to Brexit concerns and uncertainty. Evans reacted to this by stressing how important the Irish border is in terms of business.
He said: “We have repeatedly flagged in our submissions to the government and our discussions, just how important the Northern Ireland/Republic of Ireland border issue is to, not just to the wider political agreement that the UK government needs to reach with the EU, but to the operation of the insurance market.
”We have many members who provide insurance coverage across either side of the border and we insure people who cross the border every day as part of their personal or business activities.
”So, we have consistently flagged that a workable, pragmatic agreement on the border between Northern Ireland and the Republic of Ireland is critical for the insurance sector and its customers, as well as for the wider political agreement.”
While he didn’t want to speculate on whether more companies could follow NCE, Evans said that the UK and EU have much bigger problems at hand in the border arrangement is not sorted.
”If that agreement isn’t sorted, then there are much bigger problems for the UK government and EU27 in terms of the Brexit process,” he said. ”So, in this instance, the insurance issue is a subset of a much bigger problem which has to be sorted.”
Evans says the UK has taken a “pragmatic approach” to passporting rights, which allows companies in the EU to continue doing business in the UK, but wants to see the same deal the other way.
“We think they’re taking a pragmatic approach which is welcomed by our members and which we would like to see reciprocated by other EU regulators.
”It hasn’t been reciprocated yet by other EU regulators. We think it needs to be.
”We have consistently made this point and we continue to lobby across Europe, both with individual governments but also with the European institutions, that there should be some form of overarching European agreement to ensure contracts that had been written before Brexit can be honoured after them, without major company restructuring.”
“A lot of work to do”
Evans finished by saying he is very happy with the transition deal but says the work is far from done.
“In terms of next March, we welcome the transition agreement because it removes that cliff edge in terms of companies’ interests. So, that’s good.
”In terms of when the transition period comes to an end, and we leave everything to do with the European Union, we do not have in place the agreements that are required to ensure that the UK insurance industry and our customers can be properly looked after. So, there is a big job of work still to be done by the government.”