The impact of Brexit on insurance The impact of Brexit on insurance

As the Brexit date approaches, companies’ various plans are maturing. Many British insurance companies have set up entities in the EU, relocated parts of their workforce, and rewritten their models to adjust to the new UK/EU relationship—whatever that will ultimately be. Likewise, EU entities have set up plans for doing business in the UK after 29 March 2019, Brexit’s (current) go-live date.

On this page we take a closer look at the actions and reactions in the insurance sector. Keep reading for the main Brexit impacts, to-do lists for entities in these sectors, companies who have already relocated, and other valuable insights.

300
The number of UK insurers that write EEA business either through an EEA branch or under Freedom of Services (FOS).
750
The number of insurers across the EEA with some exposure to the UK market through either an existing UK branch or under FOS
 

• Brexit affects both UK insurers writing EEA business (outbound insurers) as well as non-UK EEA insurers writing a portion of UK business (Inbound insurers).
  
  
• While both inbound and outbound insurers face the same problem of potentially losing their ability to write insurance business in the UK and the EEA respectively, the options they have and the issues they face in addressing the problem are different.
  
       - Outbound UK insurers writing business in the EEA: There are approximately 300 UK insurers that write EEA business either through an EEA branch or under Freedom of Services (FOS). The first movers have been UK-based general insurers that are most focused on restructuring in order to continue to be able to access the Single Market post-Brexit. In most cases, this involves the establishment of an EEA insurance subsidiary, as an EEA branch license only allows access within that one country.
  
       - Inbound European insurers: There are approximately 750 insurers across the EEA with some exposure to the UK market through either an existing UK branch or under FOS. EEA-based insurers will have similar considerations regarding how they can access the UK after Brexit. Although this group has been slower to start reacting, they are now more active, particularly those with a UK branch presence. Most of them are seeking UK branch licenses.

• Dublin
• Belgium
• Netherlands
• Luxembourg

Although Dublin was expected to be a frontrunner soon after the Referendum result, and has attracted some new companies, it is the Benelux countries that are proving the most popular for insurers so far.

The selection process has typically been based on a number of criteria, including regulatory approach, taxation, access to a skilled workforce, and logistics. The reason why Luxembourg is viewed favorably includes the regulatory approach and its location in the center of Europe.

Insurers who have announced relocation to Luxembourg

Life insurers have long dominated Luxembourg’s insurance market, but post-Brexit movers have mainly been specialty insurers, such as shipping and property insurers.