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The Actuary The magazine of the Institute & Faculty of Actuaries

Brexit would damage Lloyd’s insurers, survey finds

More than two thirds of insurers believe leaving the EU would be bad for business, according to Haggie Partners.


Lloyd's of London © iStock
Two thirds of insurers, brokers and service providers believe a Brexit would damage Lloyd's of London. © iStock

Based on a survey of 259 insurers, brokers and service providers, the PR consultancy explained 68.7% of respondents said a British exit (Brexit) would ‘hurt’ or ‘severely damage’ Lloyd’s of London

A quarter of market practitioners believed it would have no impact while 6.2% said it would benefit the market.

The study also reported that almost 70% of respondents sold products directly into the EU. As Lloyd’s expands its international presence, 45.8% of respondents chose the EU as the top priority for development, while 23.7% preferred China and 16.2% opted for Latin America. Some 10.7% went for India and 5.5% selected the Middle East.

Adrian Leonard, Haggie PR consultant who conducted the survey, said: “Lloyd’s centrally has clearly stated its preference for Britain to stay within the European Union, and this research shows that, from a business perspective at least, the vast majority of companies in the London market agree.”

Meanwhile, a separate survey conducted by Deloitte found that 75% of chief financial officers (CFOs) favour the UK remaining in the EU. 

Based on responses from 120 CFOs of the FTSE 350 and other large private companies, the research reported 8% said UK business would benefit from leaving the EU while the remaining 17% were uncertain of their position.

Nearly nine in 10 said membership had helped UK export performance and 86% argued it had attracted foreign direct investment. 

Some 71% believed membership had contributed to the success of UK financial services and 68% claimed it had boosted the nation’s influence and connections with the rest of the world. 

Nearly seven in 10 (78%) of CFOs said the country benefited from free movement of people. 

David Sproul, senior partner and chief executive of Deloitte, said: “These results show a high level of support among chief financial officers for the UK remaining a member of the European Union.  

“CFOs see significant benefits in UK membership, particularly in terms of helping UK exports, attracting investment and strengthening the UK’s influence and connections with the wider world.”

However, CFOs also considered the EU referendum as the biggest risk their businesses faced. On a scale of 0 to 100 where 100 is the greatest risk, they gave the EU referendum a risk rating of 54. 

The referendum ranked ahead of economic weakness in the euro area (48), weak demand in the UK (46) and the prospect of higher interest rates in the UK (44).

A quarter of respondents said their firms had made, or were in the process of making, contingency plans for a possible Brexit. 

“We are already seeing the unsettling effect of the referendum on business sentiment,” said Sproul. “Our survey shows declining risk appetite among CFOs, with the referendum rated as the top risk their business faces.”