With the transition period soon coming to an end, in this article we explore some of the implications for the insurance industry and what Gallagher is doing to support clients considering the impact of Brexit on their business.


On 23 June 2016, the UK voted to leave the European Union. The result was extremely close, with 51.9% choosing leave, with 48.1% voting remain. Clearly with such a close-run decision, the negotiations that have followed have been challenging.

What does Brexit mean for the insurance industry?

We expect Brexit to mean significant changes for the insurance sector. The UK insurance industry is the fourth largest in the world and the largest in Europe with an estimated total premium volume of just under $220bn, and employing 300,000 individuals1. It is potentially one of the most impacted sectors due to the level of regulation and interconnection between the UK and EU financial systems, with the additional complexity of millions of policies incepting prior to the end of the transition period and expiring after it.

The current situation

The United Kingdom formally left the European Union on 31 January 2020 and entered into a transition period as agreed between the UK and the EU. This transition period is intended to provide the UK and the EU with the time to negotiate the details of its future relationship. The transition period is due to end on 31 December 2020 and new rules around anything from financial services, import and export and many other elements of our daily lives will come into effect from 1 January 2021.

Preparations to ensure that brokers and insurers can seamlessly support clients in the UK, Europe and globally have been a significant focus for Gallagher and all of our sector peers. As our clients would expect, we have spent a great deal of time considering the implications of Brexit and planning our solution.

As a business owner, what do I need to consider?

Much of the uncertainty surrounding the impact of Brexit still remains. It is, therefore important that our clients follow the progress of these negotiations, and consider how the potential outcomes impact the risks faced and therefore their insurance requirements. Some of the areas we recommend that businesses continue to focus on are:

  • The potential for volatility in a number of markets as the practical impact of the end of the transition period is felt;
  • Any consequential changes to the risks (and opportunities) faced by businesses;
  • Any short to medium term impact on employees and customers;
  • Changes in the legal and regulatory environments for financial services firms, such as the impact of the loss of passporting rights

I am a client, what do I need to do to ensure my insurance remains appropriate?

Businesses will all have been taking advice and considering the strategies that they need to have in place and, where possible, revisiting these strategies to ensure they align with the progress of the discussions between the UK and the EU, such as the impact of any new trade agreements. Gallagher can offer support to ensure that you understand any material changes in risk profile caused by the operational impact to your business and that your insurance cover reflects these.

Whilst there will be differing strategies between financial services providers, there are some key consistencies. For examples, it is important to note that only certain clients are affected, namely those that are located in the European Economic Area (“EEA”) – even though the approach firms take as to customer definition and risk location may mean some exceptions.

Your insurer or your insurance broker will have been in contact with you throughout the transition period and before to update you on their planning, their Brexit solution and the key timelines you need to be aware of. Review all of this correspondence carefully and contact your insurer or broker to discuss any questions you may have about the implications for your business. In principle, a UK insurer may no longer be able to underwrite an EU risk, and if you are an EEA customer, you would normally expect to be interacting with an EU broker. This may be an EU office or branch of your current broker.

At Gallagher we have been taking a proactive approach to managing our EEA clients and have issued a number of client communications advising these clients on the arrangements we have put in place to prepare for Brexit. We are pleased to have implemented a solution which allows us to continue to offer our clients the same selection of market-leading offerings and high standard of service that they expect from us.

Minimising any disruption to how we do business has been key to our plans and in order to ensure we are ready for the end of the transition period, our solution is already live, having been activated in September 2020. We have established a UK branch of an existing group-owned EU-based regulated entity - Nordic Försäkring & Riskhantering AB (“Nordic”), which is authorised as an insurance broker in Sweden by the Swedish regulator, the Finansinspektionen.

We can reassure our clients that there will be no change to day-to-day business interactions with Gallagher, including potential claims submissions. The same Gallagher teams will continue to provide specialist insurance and risk management advice and you will still be able to contact them in the same way. Nordic will also use a number of our existing trading names so you will probably recognise the usual branding on documentation and correspondence.

Do any other industry developments affect my policy?

Some clients will have policies underwritten at Lloyd’s of London, which has also been proactive with its plans. Lloyd’s is now operating Lloyd’s Brussels, which is domiciled, authorised and regulated in Belgium and licensed to underwrite EEA business.

The process of placing a risk to Lloyd’s Brussels will largely remain unchanged as Lloyd’s of London will have delegated authority from Lloyd’s Brussels to underwrite business on its behalf.

What are the next steps?

We have worked hard to ensure we are fully prepared for Brexit, and are available to support clients to help them prepare, whatever shape Brexit takes. Currently, we follow the ongoing negotiations closely, and will provide updates as new information becomes available.

1. All ABI