A no-deal Brexit “would be an unforgivable act of economic and social self-harm”, insurers have said, in the industry's most scathing attack yet on the government’s handling of Britain’s EU departure.
Brexit should be delayed if no deal is the only alternative, Huw Evans, director general of the Association of British Insurers, will say.
Any future arrangement with the EU that requires the UK to comply with rules it has no say over could be “weaponised by those in the EU that want to….damage the UK,” Mr Evans is expected to tell attendees at the ABI’s annual dinner.
This could mean savers receive less from their pensions if insurers are forced to hold extra capital that they don’t really need.
The UK is currently the largest insurance market in Europe and the fourth largest in the world, employing over 300,000 people.
The UK exports £16.7bn more insurance services than it imports and is an “undisputed global and European leader” in the sector, Mr Evans will say.
Trading on World Trade Organization terms would be “wholly inadequate”, in part because rules do not guarantee access to markets for services, which make up around 80 per cent of the UK economy.
Along with banks and other financial services firms, insurers have been preparing for Brexit by establishing around 40 branches and subsidiaries in the EU to minimise disruption. An estimated 29 million insurance contracts have also been transferred.
Mr Evans will add: “We still believe very strongly that a conscious decision to opt for no deal would be an act of economic recklessness our great country would live to regret with WTO rules offering little to no protection against the consequences.
“As a last resort, if the only alternative to no deal is some form of short delay to Brexit, then delay we should.”
“We have to keep reminding ourselves that it is the agreement on our future economic relationship that we will have to live with for decades to come, not the divorce arrangements.
“And here, we continue to face a wholly unacceptable risk that we could end up long-term rule-takers of the trading block we have just left.
“This matters because our sector leads Europe. This city with its world-famous London Market is the insurance capital of our planet.”
