The Lloyd’s Market Association (LMA), which represents the interests of the underwriting community at Lloyd’s of London, said that if the UK does not have appropriate transitional arrangements in place before Brexit, the market could lose “substantial business.”
The UK government’s Treasury Committee published a report today that stresses the importance of having transitional arrangements in place, in order to smooth the UK’s eventual exit from the European Union.
The cross party committee said that getting a transitional arrangement agreed is now “urgent” and the LMA supports this view.
David Gittings, CEO of the Lloyd’s Market Association, commented, “The LMA supports today’s Treasury Committee report and will continue to lobby government directly and via the LMG and Lloyd’s.”
Going on to explain how getting a transitional arrangement agreed on is vital for continuity in the market, “Without appropriate transitional arrangements clients will be left with no certainty as to how their contracts will be serviced post March 2019.”
But it’s more than just continuity for clients and markets, without a transitional arrangement the UK and Lloyd’s insurance and reinsurance market could begin to lose business very soon, Gittings said, “As such, the (re)insurance market will begin losing substantial business in 2018 as clients look to place or renew policies that straddle the Brexit date.”
Underwriters and their companies are already making their arrangements for a post-Brexit world, setting up European bases from where they can continue to trade with EU partners.
The longer it takes for the UK government to get a transitional arrangement in place, the more chance there is that companies will follow this approach and take some of their business outside of the UK and London market.