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Rendezvous looks ahead to Brexit

The UK’s pending exit from the EU is not a major issue for reinsurance, the 60th Reinsurance Rendezvous in Monte Carlo heard last week.

Lloyd’s Chairman John Nelson believes Brexit is “obviously” a factor because current passporting rights give access to the 27 member states.

However, reinsurance is “largely unaffected” by the move, he says.

“Therefore, it is not a huge issue for Lloyd’s, but it is an important one, since the company does maintain access to the European Union’s single market.”

PricewaterhouseCoopers’ Europe, Middle East and Africa insurance leader Alex Finn believes the industry will adapt to whatever Brexit throws up.

“In the long run, the insurance industry is going to survive, so it is going to go on,” he said.

“However, the reality is, there are short and medium-term challenges the industry will face.

“In the medium term, it is probably going to have some restructuring, with higher capital costs as a result of that restructuring, and possibly higher operational costs.

“Will they be hugely significant? No, but they could have an impact on the economics of the business.”

The conference also discussed how reinsurers can remain relevant.

“In one sense, reinsurers are more relevant than they have ever been,” JLT Re Global Head of Strategic Advisory David Flandro said. “This is because the product they sell is more effective and more economical than it has ever been.

“What reinsurers need to do to remain relevant is tell insurers how relevant they are, that they’re selling the cheapest form of contingent capital around.”