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Most people and companies like certainty and stability. Impending Brexit provides uncertainty for us all. Leaving the EU could have a profound impact on many aspects of our daily lives – job security, inflation, the cost of travel, the list is endless. But what about insurance? The chances are this will be affected too.


If we leave the single market, our insurance companies may be faced with having to pay tariffs to operate in EU countries. This means their costs would increase, which could affect premiums. Companies could pull out of the European market, but that could affect their bottom line, which could lead to higher premiums. 


European companies may find it harder to operate here, so they may consider ‘pulling out’ of the UK. If they do, the market could become less competitive, which is not normally conducive to lower prices. 


The falling value of the pound has seen us taking fewer holidays abroad, which means fewer travel insurance policies. Leaving the EU could see the end of our entitlement to the European Health Insurance Card (EHIC). This would mean those travelling abroad would be advised to take out full travel insurance. However, this could entail more, and larger, claims that EHIC would have covered.  


The financial services industry operates under a raft of legislation, much of it from the EU. Will this be continued, dropped or amended? For example, the EU insists on insurance pricing that’s free of any gender bias, even though the data tells us that male/female claims patterns are far from equal.


For now, all this is speculation. The likely effects of Brexit on insurers and on our premiums remain uncertain. In uncertain times, advisers have an invaluable role to play. Whilst you can’t predict the future, you can ensure that your clients understand the present.


If, say, premiums go up and Insurance Premium Tax (IPT) rises, clients may be tempted to save money by choosing a policy based on cost – a bad decision. Your clients trust you and your advice. You’re in the unique position of being able to explain what IPT is; to ensure they understand the cover they are getting, and to base purchase decisions on the facts as they are today.