Brexit controversies risked breaking British Prime Minister Theresa May’s government in recent days. But the uncertainty won’t, and shouldn’t stop carriers from pursuing their post-Brexit plans to open EU satellite offices, an EY executive said.
“The majority of the insurance companies, certainly the insurance companies we deal with … they’ve been working on this for a year or two years, and many have already established where they’re going to be putting more offices and certain data,” Shaun Crawford, partner, and Global Vice Chair Industry at EY said during a Carrier Management interview in Berlin on June 10.
The Brexit uncertainty crept up after a few of May’s key ministers – including Brexit minister David Davis – resigned in protest of her strategy to pursue a “soft Brexit,” an action that would be more business friendly and make it relatively easy for the UK and its and other companies to pursue cross border transactions and trade. One of May’s proposals: to press for a free trade area for goods within the European Union and also to maintain close trade ties. But May’s plans for the financial industry are drawing some serious pushback because they would lack the “passporting rights” that allow companies to do business across the EU.
Hard-core Brexit supporters want a “hard Brexit” that would enable the UK to pursue a more unilateral trade and economic strategy.
Crawford, speaking after running a panel discussion at the Global Insurance Forum, said a softer Brexit would be better. Still, he noted that insurers have already planned for both options, which led to the establishment of EU offices for many insurers and markets such as Lloyd’s of London.
“They’ve got to make the better advantage for work,” Crawford said. “It’s about where they put their businesses.”
With that in mind, Crawford said the recent instability of May’s government isn’t going to change insurers’ planning, which has included new training, hiring and EU locations.
Crawford added that March 2019, when the UK is supposed to leave the European Union one way or another, will be key.
He acknowledged that things could change before then, but added that the bigger, short-term issue is how the European Commission will respond to May’s proposed “soft Brexit” plan.