The Society’s recent Enterprise Risk Management forum focused on topics currently very relevant to Irish based insurers. In this blog post, we summarise one of the key themes examined – Brexit.
Brexit
It’s fair to say that Brexit has been the buzzword in the industry for over a year but now that the votes are in and Article 50 has been triggered are we really any wiser as to what this could mean for our companies, for us as a profession or indeed for us as individuals? The forum’s second presentation shed some light.
The forum’s chair, Eric Brown (EY), introduced the topic, outlining the current state of play and the timeline for Britain to leave the European Union highlighting key milestones along the way. It is clear the clock is ticking.
Gareth McQuillan (Aegon Ireland), David Costello (Independent Actuarial / Risk Consultant) and Aidan Holton (Scor Global Life Reinsurance Ireland) then presented the forum with the perspective of three different types of insurance companies - an international life company, a domestic non-life company and a reinsurer. It was clear that the potential impact was vastly different.
For an international life company selling business into the UK there are a number of significant challenges, both short and long term, with market volatility driven by political and economic uncertainty impacting short term returns and the specifics of the Brexit negotiation itself impacting the company’s ability to continue to trade as they do today. It’s fair to say that Brexit is top of the risk list. At the opposite end of the spectrum for a non-life domestic insurer it is business as usual, and while current levels of uncertainty are generally unwelcome impacts of Brexit are likely to be second order. The reinsurance world sits somewhere in between. While challenges with current structures and business flows may arise under various Brexit scenarios reinsurance is a truly international business, with business transacted in all parts of the world under a wide variety of regulatory regimes, challenges are therefore not viewed as insurmountable.
The discussion around the table following the presentation echoed strongly the views of the three speakers - Brexit, although a large scale external event, affects each company in a unique way depending on their profile.
The impact of Brexit is specific to each company and each company must tailor its approach to its own needs, assess its specific risk to the external event and plan actions accordingly.
Want to know more? Check out the Society of Actuaries website for the slides from the ERM forum: https://web.actuaries.ie/events/2017/03/sai-erm-forum
Danielle O'Sullivan is Head of Capital Modelling in Zurich Insurance PLC and a member of the SAI's Enterprise Risk Management Committee.
The views of this article do not necessarily reflect the views of the Society of Actuaries in Ireland, the Enterprise Risk Management Committee, or the author’s employer. The article was edited by the Communications Subgroup of the Enterprise Risk Management Committee.