Avoiding chaos in the insurance market due to Britain’s departure from the European Union in 2019 is a “top priority” for the Bank of England, its deputy governor Sam Woods said on Tuesday.
Woods said the BoE was also putting a “huge premium” on the British government being able to agree a transition or implementation period by the end of March ahead of Brexit next year.
The BoE has told insurers to submit plans on how they would cope with a “hard” Brexit or Britain crashing out of the EU.
“We are pretty much up to speed in terms of plans,” Woods told the Association of British Insurers annual conference.
John Glen, Britain’s financial services minister, said he recognised that Brexit negotiations were creating uncertainty for insurers.
“I want to reassure you this government is working flat out to secure a deal that protects the interests of our financial services industry,” Glen said in a video message to the conference.
Andy Briggs, chair of ABI and chief executive of Aviva UK insurance arm, said it was unclear whether cross-border policies being renewed in March would still be enforceable after Britain leaves the bloc a year later.
“We need a transitional approach agreed now,” Briggs said. Otherwise, insurers will have “cracked on” and set up new subsidiaries in the bloc to ensure continuity of service to customers.
“Let’s be pragmatic and customer focused,” Briggs said.
Source: Reuters (Reporting by Huw Jones and Carolyn Cohn, editing by Louise Heavens)