The UK's shock referendum decision to leave the EU may require a revised approach in relation to approximately GBP500 million (US$664 million) of insurance and reinsurance premiums that QBE currently sources from EU member countries that is written via branches of UK regulated entities under current EU passporting rules, said the Australian insurer. Still, it added that it does not expect any material impact on daily insurance operations despite Brexit.
“Should EU passporting rules not be preserved, QBE will be required to renew this business into newly established licensed EU entities,” said QBE in a statement yesterday. QBE is one of the 20 largest general insurance groups in the world with operations in all the key insurance markets. Passporting refers to direct access to EU markets.
QBE added: “The exit transition timetable is expected to take a minimum of two years. This period provides ample time for any requisite administrative transition and to ensure our service commitments to QBE’s European customers are uninterrupted. Thus our ability to source business from EU member countries remains unchanged.
"Accordingly, QBE does not anticipate any material impact on our day to day insurance operations as a result of the UK's decision to leave the EU.”
For the financial year ended 31 December 2015, QBE reported GWP of US$15,092 million, of which $4,386 million was generated from European operations.
QBE, IAG, Medibank and Suncorp are the four insurance counters which investment bank Credit Suisse has listed as among 25 big Australian stocks expected to be hit by Brexit.
Meanwhile, Ms Jennifer Westacott, the chief executive of Business Council of Australia, which is the country's peak business body, said that uncertainty and market volatility from the shock Brexit vote is likely to continue for months.
"While the underlying fundamentals of Australia's financial system remain strong, we are seeing some volatility and uncertainty in financial markets," she said yesterday. "This can be expected to continue over coming months."