Boris Johnson has been voted in as the UK’s new prime minster. But what does this mean for the country’s insurance industry?
Boris Johnson beat Jeremy Hunt, with a majority vote of 66.4%. Johnson vowed to deliver Brexit and unite the country in his acceptance speech.
But the ABI stated that the incoming prime minister would also inherit “a huge set of challenges”.
Outgoing PM Theresa May caused “unprecedented uncertainty” for the insurance sector by failing to exit by the agreed deadline. And Huw Evans, director general of the ABI, told StrategicRISK’s sister title, Insurance Times that “we should all hope that he will be able to overcome the current impasse and implement Brexit in an orderly fashion, with a transition period in place”.
“The crucial longer-term test is whether our future economic relationship with the European Union avoids the UK’s world-leading insurance and long-term savings sector becoming a rule-taker,” Evans continued.
“Beyond Brexit, we want to see the incoming prime minister and his new government support our thriving and world-leading industry by improving the competitiveness of our tax and regulatory environment, boosting savings for retirement, keeping the cost of insurance down, improving the safety on our roads, and building a social care system that works for all.”
Attention is now turning to who will be in Johnson’s cabinet. David Gauke, the Justice secretary and Lord Chancellor who disappointed insurers by reseting the Ogden rate to -0.25% had vowed to resign if Johnson became PM. However, one of those already being tipped for a top job is Liz Truss, who hit insurers hard when she was Lord Chancellor by cutting the Ogden from 2.5% to -0.75%.
But among brokers, the main thing they are hoping for is for the Brexit situation to be resolved to remove uncertainty in the market. The Brexit process has already had an impact in reducing M&A appetite.
Simon Mabb managing director at Romero Insurance brokers, said: “In our minds, the most important thing for us as brokers and the wider industry is for there to be a conclusion to the current situation to help eliminate uncertainty and allow businesses to plan for the future.”
Mabb explained that this lack of certainty isn’t good for the economy or the insurance sector in general.
“There are also other very important issues that simply aren’t getting the airtime they deserve in parliament,” he said