A.M.BestTV: British European Union Exit Could Hit the U.K. Insurance Industry

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July 9, 2015 10:49 AM EDT

OLDWICK, N.J.--(BUSINESS WIRE)-- In this “First Monday” episode, A.M. Best’s Director of Analytics Catherine Thomas speaks about how the city’s standing as a key global insurance center would be diminished if the United Kingdom were to exit the European Union. Click on http://www.ambest.com/v.asp?v=fmeuexit715 to view the video program.

The remaining “First Monday’ episode will focus on an interview conducted with Managing Director of Analytics Stefan Holzberger on how low interest rates are a “double-edged sword” for European insurers. “First Monday” is A.M. Best’s monthly program featuring commentary by the company's leading analysts.

Insurers based in the United Kingdom are contemplating their future should the country decide to exit the European Union, an economic and political partnership among 28 European countries. Thomas discusses some of the ramifications should such an exit take place. “The biggest issue for a U.K. insurer would be operating without the European Union’s financial services passporting scheme. This scheme is where a company can be authorized in one member state and has the ability to access business across the United Kingdom. An exit means that a U.K. insurer may need to set up a separate EU subsidiary in order to continue to access that business.”

Thomas also addresses the impact such an exit would have on a company’s A.M. Best rating(s). “The impact would depend very much on how much business a U.K. subsidiary is writing in the United Kingdom and if that is a significant amount of business, its ability to continue to access that business. A.M. Best would consider cost implications in establishing a separate EU subsidiary, any diminished importance of a U.K. subsidiary to its larger group and any implications for the financial performance in the larger group.”

Recent episodes of A.M.BestTV include:

  • European Insurers Ramp Up Capital Market Activity: Managing Director of Analytics Stefan Holzberger speaks about how market conditions and the looming start of Solvency II have prompted European insurers to increasingly tap the capital markets: http://www.ambest.com/v.asp?v=fmeurodebt715.
  • London Market Competition Intensifies: Director of Analytics Catherine Thomas speaks about how traditional business models in the London market are threatened by changing market dynamics and economic uncertainty: http://www.ambest.com/v.asp?v=fmlondon715.
  • U.S. State Funds Ride Market Momentum: Senior Financial Analyst W. Dolson Smith says increased payrolls, along with higher premium rates and more stringent underwriting, has led to a fourth consecutive year of growth, based on net premiums written, in the U.S. workers’ compensation residual market. Click on http://www.ambest.com/v.asp?v=fmstatefunds715.
  • Insurers Explore New Paths to Asset Management: Insurers are searching for growth and better yields through new investment opportunities via asset managers, private placements and global venues: http://www.ambest.com/v.asp?v=asset615.

A.M.BestTV covers exclusive A.M. Best information and reports, targeted topics and key developments in the (re)insurance industry every Monday, Wednesday and Friday. Sign up for alerts of episodes at http://www.ambest.com/multimedia/ambtvsignup.html. View A.M.BestTV episodes at http://www.ambest.tv.

A.M. Best Company is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

A.M. Best Company
Lee McDonald
Group Vice President, Publication and News Services
(908) 439-2200, ext. 5561
[email protected]

Source: A.M. Best Company


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