Brexit: The Lockton Way
The initial economic and emotional response to the UK’s vote to exit the EU is now behind us, leaving much conjecture and ambiguity. One certainty is that Lockton continues to work closely with its clients to inform, manage and where possible, mitigate the risks they may face.
A Committee staffed with Lockton Partners has been formed to focus solely on the issues facing our clients during and after the proposed exit. This team will identify and explore issues that have the potential to impact our clients and the business they transact through Lockton. Our purpose is to provide facts, not supposition, with a focus on the broader regulatory mechanics that have to be completed in order to allow the UK to leave Europe. At each step in this process, the effect on the insurance market and in turn individual company’s risk transfer arrangements will become clearer.
Three key milestones will be:
- UK notification to the European Council of its intention to withdraw from the EU under Article 50 of the Treaty on European Union. This is not expected to take place in 2016 but once Article 50 is triggered the UK will leave the EU two years later (unless all other EU member states agree to an extension of that period).
- European Council’s adoption by consensus of the guidelines for the EU mandate to negotiate and complete the Withdrawal Agreement. The timescale for the negotiation is not set and may well take longer than the original two year Article 50 timeframe.
- Trade deals with EU and non-EU countries. Some non-EU country trade deals are already being discussed now but Germany and France have publicly stated that the EU trade deal negotiation will not commence until Article 50 is triggered by the UK. It is expected that the negotiations will take place after the Article 50 notification, thus allowing quicker resolution post the conclusion of the Withdrawal Agreement.
Whilst continuing to drive sensationalist news headlines, Brexit does not currently affect clients’ global or domestic risk transfer programmes. The reality is that the only regulatory change taking place this year is entirely unrelated to Brexit. Lockton’s day to day client service activity will continue to focus on compliance with the Insurance Act 2015, which came into force on 12 August 2016.
In addition to the above milestones, our Brexit Committee will be monitoring the actions and concerns raised by clients, insurers, and other service providers and will provide updates to clients on these as necessary.
You can email the team directly with any specific issues at Brexit@uk.lockton.com
This post is made on behalf of Lockton Companies.