The people of the UK have less than three weeks to decide if we should remain a member of the European Union or not. Working both for a European business and closely with European clients, this is something that both impacts and interests me in my personal and professional life. As an insurance recruiter I have always worked with clients across the EU and taken for granted the opportunity and flexibility this brings.
Freedom Of Movement
Around 10 years ago I worked on a specific project with one of the “Big Four” to bring actuaries to London from South Africa. The project was very successful due to individual’s ancestral links with Europe and therefore their ability to access visas. Actuaries are in high demand due to the skills shortage in that space, and as a result many are used to working both across Europe and around the world. If we exit, how will this affect both an individual’s ability to work throughout Europe, and the demand for actuaries within the UK?
The UK has been a member of the EU for 43 years so most people in full time employment today have known no different. Although part of the EU, our island status and own currency has meant that we have been able to enjoy both the security of being in the EU and the feeling of independence. Interestingly, and depending which news channel you follow, the current split of “should we stay or should we go” sits on a near-on nail-biting 50/50.
The EU Is The Worlds Largest Insurance Market
The UK is one of the world’s largest economies, which puts us in a strong position. The EU is the world’s largest insurance market and combining the two has historically had huge mutual benefits. For the EU, the UK brings stability and for the UK, Europe is the gateway to 500m + individuals all requiring some level of insurance. The single market is certainly something that as time has passed has been taken for granted, after 43 years it’s almost impossible to imagine not having this flexibility for trade.
That said the single market is not perfect. There are European countries thriving without membership of the EU with Switzerland being the obvious example. Switzerland enjoys the best of both worlds, as it has access to the EU but does not have to comply with its regulations. Zurich is a financial centre and the head office location for one of the largest insurers in the world and the largest reinsurance firm. Norway is equally independent and Greenland’s reasons for exit (although it took 6 years) were based on different factors and has been viewed as a success.
What Will Trade Deal Renegotiations Mean For UK Insurance Companies?
One thing for sure is that if the UK choses to exit, it will have a massive impact on the financial markets globally. There will be an initial reluctance to invest in the UK due to uncertainty. Our relationships with countries like the USA and China will change as historically these countries have used the UK as a springboard for trading with the rest of Europe. We will have to renegotiate our trade deals which is likely to take time and it won’t be clear whether we will be able to get a better deal until several years down the line.
Would A Brexit Impact Solvency II Compliance?
The UK regulators led the way regarding Solvency II and our recent research showed that most insurance businesses are either Solvency II compliant now or are working to a mixture of old and new reporting standards. If we exit, we will have no influence over EU insurance regulation so will the UK’s financial investment in Solvency II be in vain? Or will we chose to remain compliant with the new standards?
What Will Be The Impact On The Contracting Market?
A vote to remain or leave is a very personal thing, so I consider the impact an exit would have on me personally. The Bank of England has confirmed that interest rates will rise and economists have backed this up citing a likely fall of investment in the insurance industry. As a recruiter, in recent months I have seen an increased interest from European clients for Solvency II interim managers. The UK contract market is dipping a little, though the need for contractors, especially IFoA qualified actuaries on continental Europe seems to be on the up.
I wonder what resourcing plans are currently in place across insurers in Europe and the impact that an exit will have on salaries?
Let me know in the comments what your thoughts are on the impact of Brexit for insurance firms – do you agree that a Brexit will likely be highly damaging to the insurance industry in the UK?
Whether or not the UK remains in the EU, getting access to the right talent will continue to be a challenge for businesses, particularly in the actuarial space. To find out more about hiring strategies you can use to attract top talent, download my Talent Hiring Checklist or reach out to me directly at firstname.lastname@example.org