Analysis from S&P Global Ratings suggests that, while a no-deal Brexit may have short- and long-term implications for the country’s economy and financial markets, insurers’ capital adequacy is so strong as to be “sufficient to weather the immediate, short-term economic disruption or weakening of balance sheets" that a no-deal Brexit could trigger.

Based on the characteristics of the 15 UK-based groups its rates, the agency currently considers the creditworthiness of the UK insurance market to be stable. With most in the 'A' category and with stable outlooks, S&P assigns a negative outlook to just one group.

A no-deal Brexit outcome would of course have some long- and short-term implications for the UK economy, through its impact on income levels and growth prospects, government finances, external financing prospects, and financial markets; but the agency anticipates outlook revisions, rather than widespread downgrades, as the more likely occurrence were no deal to be struck.

“In our base-case scenario, in which the UK does not leave the EU without a deal, we do not expect UK insurers' business risk profiles to change much in 2019-2020,” it stated.

“The UK is a mature and developed insurance market -- change would likely stem from major merger and acquisition or immediate disruptors. In our view, UK insurers are well-positioned to weather short-term Brexit-related uncertainties in 2019."

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