10-06-2016

The June 23rd referendum on whether the UK remains a member of the EU is just weeks away, but if the UK does vote to leave, will this have an effect on the insurance industry? That's what we plan to find out.

A Shift in Location

This week some of the UK's largest insurance providers (including Lloyd's of London and the International Underwriting Association of London) have said that EU insurance business would move from London to the continent, should we vote to leave.

Currently 16% of London's insurance business comes from elsewhere in the EU, which equates to £9.6 billion. Countries such as France, Germany, Spain and Italy are especially common users of London's insurance business.

How Will This Affect You? Will Insurance Premiums Wise?

Currently, all UK insurance providers have direct access to one data field, which is manageable from 28 countries. This equates to around half a billion people.

However, if the UK leaves the EU, insurers may be required to open branches abroad. Of course, this will necessitate significant resources and huge costs, which are likely to be covered by increased insurance premiums charged to customers.

So, leaving the EU will make insurance more expensive for customers? Maybe. On the other side of the argument, some believe an independent UK would make our country more attractive to businesses as there would be no link to the Eurozone and its uncertainty.

Switzerland is a prime example of a thriving and stable economy that works within the EU market, but is not a member of the Union and therefore, does not have to comply with its laws.

Matthew Elliot, Chief Executive of Vote Leave, recently told The Mirror that despite uncertainty in other markets,

"Car insurance, though, would go down in price. A recent EU court judgement put it up. Just another example of how Brussels makes life more expensive."

Whereas Graeme Trudgill, Executive Director of the British Insurance Brokers' Association, has commented saying it is unclear if the Motor Insurance Directive would still apply should the UK leave the EU.

Compare and Save Now

There's now two weeks until the EU referendum when we find out if there will be an overhaul of the UK insurance industry, but if you need insurance today, you could avoid change by comparing some of the best quotes on the web with us.

From fleet insurance to HGV cover, landlord insurance to protection for tradesmen, we've got you sorted. Compare online and find a suitable insurance provider for your needs, here.