A no deal Brexit would be an “unforgiveable act of economic and social self-harm” and the UK should delay Brexit if that is the only alternative to a no deal, the Association of British Insurers is set to warn.

In what will be the association’s strongest warning yet, the ABI’s director general, Huw Evans, will state that a no-deal Brexit “would be an unforgivable act of economic and social self-harm that the UK would live to regret”.

At the association’s annual dinner in London, Evans will also warn that with time running out, “as a last resort” Brexit should be subject to a short delay if no deal is the only alternative.
He will say that it means the UK leaving the world’s single biggest trading block overnight with nothing but World Trade Organisation (WTO) rules to replace it.

“This would be wholly inadequate and unprecedented. None of the EU’s 20 largest trading partners trade with the EU on solely WTO terms; they all have deeper agreements in place. And the WTO framework itself is designed to provide a mechanism for states to resolve trade disputes – it is not designed to be a safety net for the world’s fifth largest economy leaving the world’s biggest trading block.”

He will also warn that any future arrangement with the EU that required the UK to comply with rules it had no say over could be “weaponised by those in the EU that want to….damage the UK.

“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.

“I hope and trust this won’t happen. But it would be naïve to think that over the course of the next few decades, EU rules will do anything other than reflect the interests of its members, not its former members, seeking to draw capital, talent and market infrastructure into the EU27 and removing much that only ever went into EU law because of UK needs.

“I cannot think of many countries in the world where some of its leading politicians would openly contemplate signing up one of its world-leading sectors to decades of rules made by our competitors. Whatever we eventually agree on our future relationship that must not be allowed to happen.”

His remarks, at a dinner attended by CEOs of major insurers, senior politicians and regulators come as new figures reveal the UK insurance industry now has a £16.7 billion export surplus, with over a third of this going to the EU.

The UK is currently the largest insurance market in Europe, the fourth largest in the world and employs over 300,000 in the UK.

Share Story: