BIBA calls for Brexit clarity and an end to IPT increases

The British Insurance Brokers’ Association (BIBA) has urged the government to commit to making no further increases to Insurance Premium Tax (IPT), following three successive increases since October 2015. The call was made in BIBA’s 2017 Manifesto – Enabling the Insurance Market – in which BIBA points out that between October 2015 and June 2017, IPT will have doubled to a record high of 12%.

The manifesto also called for the government to negotiate for single market access in the EU exit. BIBA chief executive Steve White said that more than 2,700 UK insurance intermediaries have passports allowing them to undertake activities in EU states and that £7.8bn of European revenues are written or managed in London. “The UK holds the number one position in the European insurance market, as brokers are able to utilise the passporting system to access the single market,” he said. “However this position and this business model is under serious threat if we do not have barrier-free, tariff-free access to the single market, including passporting capacity and regulatory equivalence.”

BIBA said its preference was for government to consider a sectoral solution, if a whole economy access to the single market is not achievable. The manifesto calls for government to negotiate for a minimum five-year transition period and highlighted the need for a solution for EU workers in the UK’s insurance industry and UK insurance professionals working around Europe.

Graeme Trudgill, BIBA executive director, noted that 5,727 EU-headquartered insurance intermediaries possess passports to trade in the UK – many of them accessing Lloyd’s and the London insurance market. “This demonstrates the benefits to EU members of continuing barrier-free, tariff-free access to the UK and is a relevant factor in the ongoing negotiations,” he said.

BIBA has written directly to the Prime Minister, Theresa May, outlining these issues for inclusion in government’s EU exit negotiations.

In its 2017 manifesto, BIBA has also called for the Financial Conduct Authority to prioritise cost-effective supervision following a 70% increase in regulation costs for small insurance brokers.