Delay would be preferable to leaving the EU without an agreement, says ABI

Britain’s insurers are to warn that a no-deal Brexit would be an “unforgivable act of economic and social self-harm”, arguing that a delay to the process would be preferable to leaving the EU without an agreement.

In the strongest warning on Brexit yet from the Association of British Insurers (ABI), the industry body’s director general, Huw Evans, will say in a speech on Monday evening that “leaving the world’s single biggest trading block overnight with nothing but WTO [World Trade Organization] rules to replace it … would be wholly inadequate and unprecedented”.

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Speaking at the ABI’s annual dinner at Drapers’ Hall in the City of London, attended by the bosses of major insurers, senior politicians and regulators, Evans will add: “None of the EU’s 20 largest trading partners trade with the EU on solely WTO terms; they all have deeper agreements in place.”

The EU is by far the largest export market for the UK insurance and long-term savings industry, Evans will say. The ABI has previously warned that millions of car and travel policies could be in limbo if there is no transition deal.

Leaving the EU without a deal would mean that from April Britons driving in mainland Europe and Ireland will have to carry a motor insurance green card.

His remarks will come as latest figures reveal the UK insurance industry has a £16.7bn export surplus, with more than a third of this consisting of trade with the EU. The UK is the largest insurance market in Europe and the industry employs more than 300,000 people in Britain.

With time running out, Evans will say that “as a last resort” Brexit should be subject to a short delay if no deal is the only alternative.

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Along with banking, the insurance industry has been making contingency plans for a no-deal scenario for some time. Insurers have transferred 29 million insurance contracts and set up almost 40 EU subsidiaries and branches.

Evans will also warn that any future arrangement with the European Union that required the UK to comply with rules over which it had no say could be “weaponised” by the EU.

“This could result in UK insurers having to hold more capital than they need, which as well as damaging competitiveness and reducing investment in the economy could also see people get less from their pension,” he will say.