Pro Insurance Solutions managing director Robert Buchberger tells Insurance Times that there is ”an ongoing desire to operate international schemes in commercial and financial lines”

Despite single licence European passporting ending post-Brexit and no trade deal for the financial services sector, the need for insurance capacity and programmes between the UK and European Union (EU) remains.

This is according to Robert Buchberger, managing director of Pro Insurance Solutions GmbH (Pro), he told Insurance Times: “In the UK, we have observed a multitude of Part 7 transfers, all with ongoing corresponding challenges and added complexity that insurers now have to cope with, as well as focused reflections about the viability and sustainability of some European Union MGA business.”

Single licence passporting for members of the EU single market means that if a firm is authorised to undertake certain activities by the regulator of one EU member state, it can apply for a passport to do business in another without needing further authorisation.

However, UK-based firms lost this automatic right following Brexit - the UK is now seeking an equivalent decision from the EU to allow these financial services firms to continue to serve EU customers from the UK.

Buchberger continued: “Whilst the big international insurers are usually established with their own infrastructure and resource on both sides, smaller and mid-size insurers look for external support to face this increasing complexity.”

Despite this potential service speed bump, Buchberger pointed out that he is seeing “an ongoing desire to operate international schemes in commercial and financial lines and liability, or supporting international expansion of specialised insurtechs”.

Consolidation needs expertise

Buchberger added that the consolidation of existing EU MGA businesses requires expertise in areas such as operating run-off, specialised claims handling and the oversight or supervision of brokers and MGAs.

Pro provides audit and advisory services, as well as assists claims third party administrators (TPAs) in the UK and EU, utilising a ’one-stop-shop’ approach that is based on knowledge of both regulatory environments.

“For new business and programmes, Pro facilitates the flow of capacity and the delivery of service via its MGA - [the] platform [provides] risk carriers, brokers and MGAs the possibility to either host or operate bi-directionally their EU [or] UK schemes,” Buchberger explained.

Pro’s UK and EU MGA entities are Lloyd’s cover-holders; the claims companies are approved TPAs.

Pandemic impact

The Luxembourg 2020 Annual Review revealed that the Covid-19 pandemic continues to impact the insurance sector, as investors take a ’wait-and-see’ approach.

Non-life insurance was significantly less affected by the crisis, according to the report, premiums rose by 7.49%, but much of this growth was due to premiums stemming from Brexit transfers, which grew by 10.02%.