Brexit is a major problem for captive insurance the industry, according to Paul Owens, CEO of Willis Towers Watson’s global captive practice.
Speaking on the ‘political climate and the future of captives’ panel at the Captive Insurance Companies Association (CICA) 2019 conference, Owens described Brexit as “a two-year divorce that is costing the UK 10s of billions of pounds”.
He added: “By the process of answering one question: do you want to stay in the EU or leave? The largest divorce in history was initiated.”
Specifically focusing on its potential impact on the insurance industry, Owens emphasised the importance of passporting.
He explained: “Passporting means you can trade between countries without a problem.”
“If you want to issue an insurance policy in Italy, you can issue that from anywhere within the EU. You can buy a motor policy in Italy, issued by a UK insurer.”
He added: “Just think what happens on the 30 March when the UK leaves the EU, who is to say whether that motor policy you have in Italy will now be valid because there is no longer any passporting once the UK has left the EU. “It is a real challenge just for our industry alone.”
The full terms of the UK’s exit from the EU, or whether it will happen at all, still remains uncertain, and Owens noted that this uncertainty created significant issues.
He said: “The entire country went into Brexit not knowing what is going on.”
“For our industry, this is a major problem, without guidance from the government or authorities, on the 30 March, no one knows if insurance policies are going to be valid.”
“ If you want to claim on a policy, can you make that claim? Because the policy may no longer be valid.
“All governments are saying ‘yes of course’ but these insurance policies may not be valid.”
