According to government figures, financial and insurance services contributed £124.2 billion in gross value added (GVA) to the UK economy in 2016. This accounted for around 7.2% of the UK’s total GVA and 3.1% of all jobs during the period. This demonstrates just how important insurance and finances are to the country’s economy and explains why many experts are watching the sector closely in the run up to Brexit.
Luckily for those who work in finance and insurance, and for those invested in the UK economy, a recent study has revealed that the vast majority of UK insurance brokers are planning on staying put after Brexit. What’s more, as @TheActuaryMag says:
“A whopping 80% expect London to retain its place as a leading global insurance market after leaving.”
Confidence in the UK economy
According to the study, carried out by DAS UK Group, just 2% of UK-based commercial lines insurance brokers have contingency plans in place to move all or part of their operations to the EU after Brexit. In fact, most have significant confidence in the post-Brexit economy, with 79% of respondents expecting their company to grow in the next few years and almost half anticipating revenues to increase by more than 10%.
The survey revealed that businesses in the South East were most confident in the future economy while those in Wales were the most gloomy. However, as London and the South East are the main hubs of the financial industry in the UK, the confidence of the region counts for a lot.
Hard Brexit and ‘no-deal’ Brexit
Although the majority of insurance brokers are optimistic about life after Brexit, a survey of business leaders by the Institute of Directors has found that just 11% of UK companies have begun to plan for life outside of Europe. More worryingly, the same survey found that 18% of business leaders aren’t aware of how EU laws affect their sector and 32% don’t understand how a ‘hard Brexit’ or a ‘no-deal’ Brexit would affect trade.
As well as business leaders being unaware of how potential rules and regulations will affect them post-Brexit, politicians have yet to even touch on the subject of trade in their negotiations with the EU. Until talks begin in earnest, it’s impossible to say exactly how Brexit will affect the finance and insurance sectors and how many businesses will decide to relocate away from the UK.
In the run up to Brexit, and following the UK’s departure from the EU, financial rules and regulations are likely to be overhauled. To make sure you stay up to date with all the latest financial news, explore our site or contact a member of our expert team.
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Written by: Editorial Team