Insurance and reinsurance broker Aon has advanced plans to establish a new European hub outside of the UK to ensure continuity for its clients post-Brexit, if necessary.
The re/insurer broker has underlined the significant challenge the ongoing uncertainty surrounding the outcome of Brexit poses for everyone, stating that the prospect of there being no contract continuity after the 29th of March, 2019, “is unthinkable.”
Concerning Brexit, Aon has adopted the stance of “prepare for the worst but hope for the best,” and states that it is working hard to ensure that in the case of a hard Brexit, disruption to its services and to its clients and clients’ insurance programmes, is minimal.
One of the steps the broker has taken to limit the impact of a hard Brexit, according to comments in its Q2 Financial Lines Insurance Market Review, is to move forward with “advanced plans for the development of a new European hub which can contract with our European clients on our behalf, if necessary.”
In light of the ongoing uncertainty surrounding Brexit and what the operating landscape for much of the UK’s financial services sector might look like, the fact Aon has advanced plans to develop a new EU hub isn’t surprising, and follows a growing number of UK insurers and reinsurers that have already, or are in the process of doing likewise.
Ratings agency A.M. Best highlighted recently how UK re/insurers are moving forward with their Brexit plans, a trend that appears to be increasingly driven by a lack of clarity from the UK government.
Aon notes that the majority of the London market carriers that it works with have advanced plans to ensure their contracts are still valid post-Brexit, plans that recognise the wealth of expertise and capacity available in the London marketplace, but that also understand the need to comply with a new, post-Brexit regulatory environment.
“We have developed our own Brexit continuity endorsement for use on programmes when we are not yet satisfied that a carrier has a robust solution, and a Brexit contingency product,” says Aon.
At the same time, the broker’s market security team is paying close attention to carriers options, and is also prepared to remove carriers that it deems are not “adequately prepared” from its approved list.
Furthermore, Aon has been undertaking training of its brokers so that they do not agree carrier policy clauses that fail to offer the fullest continuity post-Brexit.
“In summary, we are being proactive and will be constantly adapting our stance on the Brexit landscape as it evolves over the next seven months, please contact your usual account representative for more information,” says Aon.
