Impact of Brexit on the insurance market

On 31 January 2020, the United Kingdom officially left the European Union. Insurance companies and regulators have an 11-month transition period to establish their new operating modes.

British insurers will be able to underwrite policies on European territory up until December 31, 2020. On their side, European insurance companies, which are already present in the United Kingdom, benefit from a temporary permission scheme set up by the UK Treasury in 2018. They are entitled to a three-year transition period.

In the run-up to Brexit and in the event of a "no-deal», several British companies have set up subsidiaries in Europe, most often in Luxembourg, Dublin and Brussels. Other corporates have opted for creating European companies. As of March 2020, Europe and the United Kingdom will engage in new negotiations.

The nature of bilateral relations between the two sides of the Channel will largely depend on future agreements. According to Catherine Thomas, an analyst at AM Best, what is unknown is “whether the European commission perceives the UK’s prudential regime as equivalent to that of Solvency 2”.

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