AFL Insurance Brokers Chairman Toby Esser.
As the Brexit clock ticks forward to 29th March, AFL Chairman Toby Esser shines a light on a strong London market ready to adapt and continue with business as usual
Back in 2017, when I spoke at the 2017 GVNW Symposium in Germany, the concern and shock among the audience of European insurance professionals about the implications of Brexit was palpable.
Such were the dire warnings and hyperbolic language that I felt it was something of an anticlimax when I stepped up to tell the audience that I thought everything would essentially be fine, and the insurance industry needn’t panic.
Fast forward 18 months later to 2019, here we are facing down the (currently) imminent deadline for the UK’s departure from the European Union, and much of the concern and hyperbole remains.
But the only real surprise for me between my 2017 GVNW address and now is that nothing has changed – there is still no certainty, we have just moved closer to the possibility of a no deal situation. Indeed, while AFL has achieved a lot in that time, I wish I could say the same for those negotiating the terms of Brexit.
A proactive market
Unlike the politicians, the insurance market has been proactive: Lloyd’s quickly moved to establish its Brussels subsidiary to allow the market to write business using a single European domicile, and the London Market Group has been lobbying the government to agree a deal that guarantees regulatory equivalence with the EU and continued rights to cross border activity.
Deal or no deal, the solution and infrastructure is in place for the London Market to continue trading in Europe and internationally with minimal friction.
Nevertheless, there has been a degree of fear mongering. In fact, we are seeing some insurance businesses considering moving from London to Europe, where they can find more certainty. While I think this will continue to happen, unfortunately, it must be possible to have a rational conversation about this.
London will remain an insurance hub
Certainly, from a wholesale insurance perspective, business comes to London from all over the world for a reason. If it could be placed locally, it would probably already be there. The London Market solves problems, and solves them on an international scale. We have the ability to place business from territories around the world regardless of whether Lloyd’s has a direct license in that country.
This is a view I see echoed by our partners in the Worldwide Broker Network. While there is concern about the uncertainty over Brexit, there is a sense that our partners are generally relaxed that the solutions for insurance are already in place, and that the London Market has the tenacity to innovate and adapt quickly to changing environments.
After all, the WBN generally handles multinational business, placed all over the world, and our partners here are very comfortable with the concept of fronted insurance programmes that are reinsured back to London.
Issues over international licensing, passporting and domiciles are solvable, and have been proven so time and again the world over. Really, we’ve been solving challenges like Brexit since the start of the Lloyd’s market.
At the same time, given the political uncertainty that abounds, there has never been a better time for independent brokers to prove their worth, and the value, insight and trust they bring to their relationship with clients.
We know we can provide the certainty and continuity that our clients are looking for.
For the London Market at least, the countdown to the 29th March (or beyond that if the deadline is delayed) is a countdown to continuity, and it’s a message that the international insurance community should be proud to share.