Brokers and insurers split over Brexit

The 23 June referendum will leave one-half of the insurance industry unhappy.

The great debate of our time may have the nation split in two, but the national conversation about the merits or otherwise of Brexit also appears to have the insurance industry divided into two camps as well.

Across the country those favouring leaving the European Union typically emphasise immigration and the need for greater control of borders.

Economic

They also often point to the issue of political sovereignty and a desire to reclaim powers ceded to the EU.

Proponents of remaining in Europe overwhelming cite the economic benefits of being part of the union and the peril the UK would be subject to if it left.

The bifurcation of the insurance industry hinges entirely around this latter economic point as would be expected for a major financial sector.

Insurers

Anecdotally at least, larger firms such as insurance companies support remaining in the EU while many mid to smaller sized firms, like brokers, would prefer an exit.

The roll call of insurers to nail their colours to the Bremain flag is already quite a lengthy one.

Allianz, Aviva, Axa, QBE Europe and RSA are among the industry behemoths to declare themselves as Europhiles in the manner of speaking.

Their reasons (trade, no barriers, passporting) can be easily gleaned from a casual glance through Insurance Age’s website, and are perhaps best summed up by the Association of British Insurers.

Brokers

But a very different picture emerges from many brokers who feel they don’t gain as much as the bigger firms from being inside the union.

They mention matters like a different market structure for brokers added to a different regulatory regime in Europe and yet intermediaries here are effectively bound by EU rules.

It must however be pointed out that the British Insurance Brokers’ Association is firmly of the view that continued membership of the EU is the way forward.

Whichever way the referendum goes once the votes are cast on 23 June, one half of the insurance industry isn’t going to happy.

*Information above provided by Insurance Age