Some of the largest reinsurance companies in the world are calling for the UK and EU to maintain continuity, calling for existing access arrangements to be maintained between the pair, in a letter seen by Reuters.
For UK insurers and reinsurers, continued access to European markets after Brexit has been implemented is seen as vital, but the need for continuity also applies the other way, with major reinsurers calling on the European Commission (EC) to support their calls for disruption to be minimalised.
Reuters said that a letter from the Zurich headquartered Global Reinsurance Forum, a group of the world’s largest re/insurers, sent to the EC asked for mutual access to be assured, between European companies and the UK market after Brexit.
“The UK’s withdrawal from the EU raises difficult questions about the future trading relationship between the two jurisdictions,” Reuters reported that the letter stated.
“If passporting arrangements for EU reinsurers into the UK and vice versa are not maintained, then national regulations will inevitably make cross-border reinsurance between the two jurisdictions more difficult and expensive,” it continued.
“We strongly support the position that the UK should continue to operate an insurance regulatory regime which is consistent with Solvency II,” the reinsurers’ letter stated.
Reinsurance markets rely on the ability to transact and shift risks across borders. Part of the premise of reinsurance is that risks should be globally dispersed and diversified, meaning that market access issues can risk increasing the cost of reinsurance, and also its effectiveness.
Reinsurers are said to be concerned not just about market access for doing deals, post-Brexit, but also regarding their ability to participate in the Lloyd’s of London re/insurance market.