Despite the delays many people and even large businesses are unsure how things will turn out after Brexit. One of the many concerns for most is how the financial services industry that has been flourishing in the UK for decades will fair in the European market without the current deals in place.
Under European Union agreements a UK based financial services institution can freely trade in European countries offering products and services to citizens and residents of all European Economic Area (EEA) countries as long as they have a branch located there, appoint agents in that state, or provide cross-border services. This ‘passporting’ feature of the EU trade agreements has been a successful way for large and small financial entities to offer their products to both European consumers, companies, and UK citizens resident in other European lands.
In preparation for the post-Brexit absence of these passporting measures the larger UK financial institutions have taken measures to ensure they can still serve their customers in Europe by setting up or expanding their subsidiaries in Europe. Barclays is expanding its Barclays Bank Ireland (BBI) business so that this Ireland-based subsidiary can take over ownership of European customers and their products. Similarly, RBS will utilise its Netherlands-based NatWest Markets N.V business vehicle.
There are remaining question marks over whether UK citizens living abroad will still have full access to their banking services in the UK. RBS have warned that “there is a risk that in the event of a ‘no deal’, access to certain banking services in the UK could be restricted”.
The insurance industry is simpler in that most UK insurance policies are covered by insurance entities based in the UK. However, owners of holiday homes in Europe should ensure that their home insurance policy will continue to operate. Some insurers such as Intasure have ensured that these policies are now covered by European partners, and in their case are provided by an Arthur J Gallagher group company based in Sweden.
Travel insurance is the one insurance group most likely to be affected negatively by Brexit, with no clarity yet over coverage for policyholders delayed by post-Brexit no deal events like Dover grinding to a standstill or European airports closing their airspace to UK air operators until a deal is in place.
All financial institutions are working hard of course to ensure none of their customers are left high and dry after Brexit, and the majority will try to make arrangements for a seamless transition. However it is likely that some people, especially those with holiday homes in Europe, and UK citizens resident abroad, may lose some elements of their insurance cover or banking services. Its advisable for such people to seek new insurance sooner rather than later, to ensure their risks are covered. Anyone considering relocating abroad during the Brexit period should also consider which institutions they have their financial products with, trying to pick institutions which have EEA subsidiaries already set up to cater for post-Brexit.
Following Brexit it will be too late for you to get in touch with your insurance company to check if your home in France or Spain is still covered, so try and do this now, and if you’re not reassured by the answer, why not consider porting your insurance to another provider now or at your next renewal date.
Sources:
https://home.barclays/who-we-are/our-strategy/preparing-for-brexit/
https://personal.rbs.co.uk/personal/support-centre/brexit-hub.html
https://www.aviva.co.uk/aviva-edit/your-future-articles/brexit-and-your-policies/
