British insurers face ‘perfect storm’
Tax increases, inflation, currency deterioration, Brexit and US protectionism threaten to create a “perfect storm”, the British Insurance Brokers’ Association (BIBA) warns.
CEO Steve White told the association’s annual conference last week that the doubling of the insurance premium tax in just 18 months and changes to the Ogden discount rate for calculating catastrophic injuries are two major domestic concerns, as is the forthcoming general election.
While Brexit challenges British insurers’ trade in Europe, talk of protectionism in the US is dampening optimism of a US-UK trade deal.
“Cost pressures within our industry, economic factors affecting insurance buyers, uncertainty and new competitive threats to the UK insurance market are all possible issues we have to deal with,” he said. “If a few of these storms materialise and hit us at the same time, they could create significant challenges for us.”
But Mr White says despite these “clouds”, there is “plenty of better weather” on the way.
“Our industry remains in a healthy state and continues to make a significant contribution to the UK’s service trading surplus. There are opportunities arising from insurtech, from autonomous vehicles and from the desire to really increase trust in our sector, and we will be right behind our members as these opportunities develop.”