ABI: EU could ‘weaponise’ rules to damage UK

The director-general of the Association of British Insurers is expected to issue a warning tonight around the mounting risks of the ongoing Brexit negotiations.

Huw Evans is scheduled to address insurers at the association’s annual gala in London, where he will caution that any future arrangement with the EU that required the UK to comply with rules it had no say over could be “weaponised by those in the EU that want to…damage the UK”.

“This could result in UK insurers having to hold more capital than they need, which as well as damaging competitiveness and reducing investment in the economy, could also see people get less from their pension.”

With time running out, Evans will add that “as a last resort” Brexit should be subject to a short delay if no deal is the only alternative. “This would be wholly inadequate and unprecedented. None of the EU’s 20 largest trading partners trade with the EU on solely WTO terms; they all have deeper agreements in place. And the WTO framework itself is designed to provide a mechanism for states to resolve trade disputes – it is not designed to be a safety net for the world’s fifth largest economy leaving the world’s biggest trading block. Nor do its rules guarantee market access for the services which make up four fifths of the UK economy. This matters because the EU is - by a very long distance - the largest export market for the UK insurance and long-term savings industry.”

“As an industry we have done everything possible to prepare for no deal, including transferring an estimated 29 million insurance contracts and the establishment of nearly 40 EU subsidiaries and branches to minimise disruption to customers. But we still believe very strongly that a conscious decision to opt for no deal would be an act of economic recklessness our great country would live to regret with WTO rules offering little to no protection against the consequences. As a last resort, if the only alternative to no deal is some form of short delay to Brexit, then delay we should.”

His remarks, which come as new figures reveal the UK insurance industry now has a £16.7 billion export surplus with over a third going to the EU, will be heard by CEOs of major insurers, regulators and a number of senior politicians.

Evans is expected to implore politicians not to contemplate signing up one of its world-leading sectors to “decades of rules made by our competitors”.

London is the insurance capital of the world. With UK insurance industry exports totalling £16.7bn, the industry employs over 300,000 people across the country.

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