by Dr Matthew Connell, Director of Policy and Public Affairs at the Chartered Insurance Institute

Industry View from

Brexit and the general insurance market

As we approach the latest deadline in the Brexit saga, there is a huge amount that remains uncertain.


Although the possible outcomes open to this or any future government are still very wide, it is still best to think about Brexit in terms of the most disruptive scenario – a no deal – and the most important stakeholder – the public.


For consumers, the most immediate impact of a no-deal Brexit scenario will be on travel insurance, specifically in relation to the European Health Insurance Card (EHIC), which will no longer retain any validity.


The EHIC is likely to be suspended from day one if we leave the EU in a no-deal scenario, as no implementation period or replacement system will have been agreed, and both treaties and legal agreements between the UK and the EU27 will no longer apply.


Although changes to travel insurance may seem like a relatively trivial issue compared to some of the scenarios considered in the government’s planning for no deal, it is worth remembering that for millions of UK citizens, it provides the their only affordable access to healthcare when they go on holiday.


The key risk is that people who have never bought travel insurance when travelling to Europe may continue to ignore the need for cover, either out of habit or out of a lack of awareness of the implications of a no deal. For those that go on to have a health emergency while travelling, the cost of not having cover could be financially disastrous.


The machinations of the wholesale insurance market, which is focused on larger, and often multinational clients, may seem more distant to the public, but they still have a huge impact on our lives, providing the risk management tools that enable industry to function and vital services to be carried out.


This part of the market faces its own challenges in a no-deal scenario, and although firms in this sector have the resources to develop workarounds that will allow their business to function in extreme circumstances, a huge amount of management time and effort has already been spent in no-deal planning. Much of this effort has focused on the corporate governance changes needed to provide contract certainty to clients across Europe. This vital work has averted chaos for the public, but it is hard not to think that this effort could have been better spent on developing new products and services if the Brexit transition process had been less chaotic.


As this chapter in the Brexit story draws to a close, it is important that we all resolve to create an environment where confidence and the supply of vital products and services for the public takes precedence over political brinkmanship.

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