- Economic confidence across the insurance profession falls to
its lowest level since 2011
- Nearly half (48%) of those working in insurance expect the
economy to deteriorate in 2017
- 92% of those in the Lloyd's market believe securing EU
passporting rights should be a top priority in Brexit
- The CII calls on Theresa May to make early commitment to
transition arrangements post-Brexit
As Prime Minister Theresa May is set to announce more
detail on preparations for Brexit negotiations in her keynote
speech today, the Chartered Insurance Institute (CII) urges the
Government to make an early commitment to transitional arrangements
following the UK's departure from the EU.
New research from the CII Member Economic outlook and Brexit
survey published today highlights that economic and
business confidence across the insurance and financial planning
profession has plummeted to its lowest levels since 2011. The
optimism in the UK economy that had been building in recent years
has fallen off a 'cliff edge' to provide the greatest one-year fall
since records were first collected by the CII[i].
Almost half (48%) of those working in insurance expect the UK
economy to deteriorate over the next 12 months, nearly ten times
higher than a year ago (5%). Historically, the index has been much
less volatile and so today's research represents a significant
change in confidence.
Within the insurance profession, those working in the Lloyd's
market are the least optimistic about the year ahead. Over a
third (37%) expect the economic situation to worsen and only a
fifth (20%) think it will improve (GI market: 20% and 33%
respectively). The research revealed that those working in the
London market were the least likely to have voted to leave the EU
and value the benefits of the single market. In fact, the vast
majority (92%) believe that passporting rights should be a top
priority in the Brexit negotiations for a smooth transition.
While there may be differences in opinion between the
sub-sectors of the insurance profession, there is widespread unease
about what will happen to the British economy following Brexit.
Nearly half (45%) of the CII's membership say they are concerned
that the insurance and financial planning sector will not be well
represented in negotiations, which will have a detrimental impact
on both the profession and its customers. All of those surveyed
agreed that securing economic certainty for future planning was the
most important element of the Brexit negotiations above all other
Keith Richards, Managing Director of Engagement at the CII,
"We call on Theresa May today to make an early commitment to a
transition arrangement to bridge the transfer from the UK's
membership of the EU to its new trading relationship outside of the
bloc. This commitment and clarity will help alleviate this
uncertainty and provide the conditions for as much business
continuity as possible for the sector.
"The insurance profession cannot adopt a 'wait and see' approach
to the UK's future relationship with the EU indefinitely.
Publishing specific proposals regarding what form transitional
arrangements should take before beginning negotiations, and to make
obtaining them an early and important objective once negotiations
have commenced, would discourage businesses from pre-emptively
making changes based on a 'worst-case' scenario. We have major
concerns over what the impact of this uncertainty could mean for
the consumer and urge the government to make an early commitment to
a transition arrangement."
The CII Member Economic outlook and Brexit survey is the fifth
annual wave of the CII Member Survey conducted in partnership with
the Centre for Economic and Business Research (Cebr). Analysis is
measured against economic, business and employment prospects
indices first developed in 2011. The responses from 3,711 CII
members were received between 4 - 21 Nov 2016.
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[i] The CII has conducted an annual survey of business and
economic confidence with its members since 2011.