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(This is the uncensored version of that which appeared in the Business Matters section of The Worthing Herald.)

Unlike the Conservative Party the insurance market is not tearing itself apart over the forthcoming EU referendum. There has been little debate in the insurance media, no insults, scare stories or mis/exaggerated information, just the two main trade associations. The Association of British Insurers and the British Insurance Brokers Association (despite not polling their members) declaring that they are in favour of staying.

On the wider political front we are being asked to trust the judgement of the ‘big hitters’ lining up on both sides, although some of their previous judgement calls are dubious to say the least.

On the ‘remain in’ side we have David (which side shall we bomb today) Cameron, where even Obama has now criticised his intervention in Libya. George (the financial genius who predicted the recession – or perhaps not) Osborne, Peter (I can’t even sort my own mortgage) Mandelson and Tony (if he tells you the time, check your watch) Blair.

For the ‘outers’ there are Boris (lets buy expensive water cannons even though their use is illegal) Johnson, Nigel (have I resigned again) Farage and Michael (how many teachers have I upset today) Gove. There should have been others, but the likes of Theresa May and Jeremy Corbyn seem to have changed allegiance, possibly for personal or party gain.

With such a big decision facing the country, it would be good to hear reasoned, balanced arguments from both sides setting out the pros and cons of EU membership and their take as to why we should either stay or go. But so far we just seem to have had a string of claims that support either remaining in the newly ‘reformed’ EU or accusations from ‘outers’ of scaremongering and threats to those not supporting the Government position. Certainly some of the scare stories seem reminiscent of 1999 when we were warned that the millennium bug would make aircraft fall out of the sky and the end of the world was nigh. Some Insurers still have a millennium exclusion, just in case!

If we do vote to leave, there could be some practical issues with UK insurers writing business in EU states, but they tend to set up subsidiaries in the countries concerned, as do the Europeans. Many well-known brands such as AXA, Allianz and Zurich are owned by European companies and it is hard to see anything other than business as usual.

Insurers have in the past complained about solvency requirements coming from the EU, however, many feel that the UK’s Prudential Regulation and Financial Conduct Authorities could impose even tougher regulation than that led by Europe. One positive is that it may stop the Chancellor trying to align the rate of Insurance Premium Tax with other EU states, which is commonly over 20%.

To many people, the only EU influence on insurance is motor green cards or European certificates, which are unlikely to change in the short term. UK Insurance policies have had to change to keep pace with EU laws and rulings, such as gender equality, but if we leave, policies will still have to keep pace with any changes in British law.

Most of the insurance market will be more interested in the general effect on the economy and their investments and will take a view on how their individual businesses will fare.

With 3 months still to go, there are likely to be a few twists and turns before the vote.  Being  cynical, I wonder if Cameron has a few further (pre-agreed) concessions that he will miraculously obtain from other EU leaders at the death, in the same way that the Scots were bribed with further concessions just before their independence referendum.

I have heard one horror story. Instead of an ace up Cameron’s sleeve, perhaps it is a ‘Trump’ card and we (or the EU) could become the 51st  state of America!

 

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