Only 124 UK insurers, making up 0.16% of all insurance businesses in the EU27, do not have contingency measures in place for such a possibility.
However, Eiopa’s data is based on information from November 2018, and the remaining 0.16% could have introduced measures since.
The European authority has also set out guidelines for businesses that are yet to roll out contingency measures.
In the event of a no-deal Brexit, “on 30 March 2019, the United Kingdom becomes a third country, and UK insurance undertakings and distributors lose their right to conduct business across the EU27 member states by way of freedom of establishment and freedom to provide services”.
Eiopa’s statement added that, “in principle, insurance contracts concluded before that date by UK insurance undertakings in the EU27 are valid after that date. However, the insurance undertakings would not anymore be authorised to carry out insurance activities with regard to these cross-border insurance contracts”.
Companies are ‘relaxed’
Simon Willoughby, managing director of Acuity Consulting, told International Adviser most UK businesses working in the EU are likely to be non-life companies, and the 124 are probably smaller general insurance firms offering pet, contents and travel insurance to UK expats.
“The fact that most non-life products are annually renewable means that, even if the UK crashes out of the EU, any policy written between now and 29 March would simply lapse 12 months later,” Willoughby added.
“You can see why some of these smaller companies might be ‘relaxed’ about this situation; and, in the absence of any great certainty, are just sitting on their hands.
“Of the 124 UK firms, there are likely to be few actual UK life companies due to the lack of gross roll-up on investment-linked products, although the figure may include some firms offering term assurance to, say, UK expats.
“Also, sadly, there are very few UK financial advisers conducting cross-border services in the EU and fewer still promoting the products of UK life companies for the reasons stated above.”