Despite strong relations between the United States and the United Kingdom, the potential impact of Brexit on US insurance companies will be minimal overall and easily absorbed by the market, according to a report from the Actuarial Society.
In the report, released Tuesday, the SOA projects, the effects of Brexit on US insurance companies will range from small to significant depending on factors such as policy disruption, trade relations, treaties and taxes.
The researchers identified three potential Brexit scenarios and the effects they could have on the US insurance market, based on consistent growth trends, a moderate picture of future effects, and a worst case scenario.
Even in the worst case, the researchers see that the US insurance premiums increase by 20% from 201
"Although this is a significant difference in dollars – $ 234 billion in the year 2022 – it is still in line with market growth and a positive outlook for the US. Even with this high inflation, high yield, stronger dollar environment, the US market is predicted to be minimal However, if the worst case scenario is perceived, disruptions in politics, trade relations, treaties and taxes will affect US insurers and their clients, the report said.
Reinsurance capacity in Europe could also withdraw , limiting the flexibility of US insurance companies in writing coverage, the report reported, while UK holding of US companies could see greater losses.
But even in the most extreme view, the US market is only expected to be least affected, the SOA report said. 19659002] Sponsored by the SOA Finance Research Committee, the report was written by Julie Y. Nye, international insurance consultant at Expat Consulting.