French buyers told no need to panic over Brexit

With just over a year to go before the UK leaves the EU, some continental European buyers are concerned about future access to the London market, but excess capacity and insurers’ contingency plans mean they have little to fear, according to brokers and insurers at the AMRAE Rencontres meeting this week. According to Ferma president Jo Willaert, there is growing concern among the risk management community as Brexit draws closer. However, Brexit is more an issue for insurers than insurance buyers, he said. “Uncertainty over Brexit is more of a risk for the insurers, as insurance buyers have choices. There is more than enough capacity in Europe and much of the knowledge is with the brokers,” said Mr Willaert. Brexit is unlikely to be problematic for French insurance buyers, according to Fabrice Domange, chief executive officer of Marsh in France. The French insurance market is the fourth largest in the world and only a relatively small number of French companies buy cover in the London market, other than for very specialist areas like political risk, he told CRE. “More and more, the feeling is that clients will not see the need to go to London if they can find capacity and the same cover in continental Europe. Brexit reinforces this even more,” said Mr Domange. He believes Brexit could ultimately be a positive for insurance buyers in the EU and increase their choice. “Brexit is pushing insurers to create capacity in Europe and give more flexibility to brokers and buyers,” he said. In fact, Brexit is an opportunity for European carriers to win market share from the London market, according to Jean Rondard, head of corporate risk broking at French broker Gras Savoye Willis Towers Watson. He believes that Brexit is likely to see some current London market business shift to conventional continental European insurers in the future. “I can anticipate that less business goes to London after Brexit,” he told CRE in Marseilles. Some policies written in the London market could easily be placed with EU-based insurers, although this could include London market players with an EU licence or Lloyd’s’ planned insurance company in Brussels, explained Mr Rondard. However, some business is “unique” to Lloyd’s and can only be placed in London, he continued. Brokers and insurers will need to find “alternative mechanisms to channel London market capacity”, he added. “Some of the large names in the London insurance market already have operations in Europe, but for Lloyd’s this is more of an issue. However, we are looking at ways to reorganise and re-engineer such programmes,” said Mr Rondard. “Brexit is complex but it does not affect many of our clients. There are not all that many unique Lloyd’s solutions and there are alternatives to the London market. There is no danger that clients will go uncovered,” he said. Less than 5% of Aon’s French business is placed in London – mostly excess lines, marine and specialty risks – explained Robert Leblanc, president and CEO of the broker’s French office. Some 95% of its client business is placed in-country, with both national and international insurers, he said. Mr Leblanc does not expect Brexit to limit French buyers access to capacity or underwriting expertise in the long term. “We will still be able to place excess covers in London, there will be solutions to access the knowledge of the London market and to write policies in the EU, such as through Lloyd’s Brussels,” he said.

French buyers told no need to panic over Brexit

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