Insurance Jottings
No-Deal Brexit Grows More Likely as UK-EU Trade Talks Remain Deadlocked
Britain is likely to complete its journey out of the European Union in three weeks without a trade deal, British Prime Minister Boris Johnson and European Commission chief Ursula von der Leyen said on the 11th December.
Britain quit the EU in January but remains an informal member until the 31st December – the end of a transition period during which it has remained in the EU single market and customs union.
Both sides say they want to agree arrangements to cover nearly US$1 trillion in annual trade but negotiations are at an impasse, with Britain standing to lose zero-tariff and zero-quota access to the huge European single market.
“It’s looking very, very likely we’ll have to go for a solution which I think will be wonderful for the UK, we’ll be able to do exactly what we want from the 1st January, it will obviously be different from what we set out to achieve,” Mr Johnson told reporters.
“If there’s a big offer, a big change in what they’re saying then I must say that I’m yet to see it,” said Johnson, the face of the “leave” campaign in Britain’s 2016 Brexit referendum.
Mrs von Der Leyen was quoted by an EU official as telling leaders of the bloc’s 27 member states attending a summit in Brussels on the 11th December that prospects for a deal had worsened.
“The probability of a no deal is higher than of a deal,” the official said on condition of anonymity.
Mr Johnson and Mrs von der Leyen gave negotiators until Sunday evening, the 13th December to break the deadlock over fishing rights and EU demands for Britain to face consequences if in the future it diverges from the bloc’s rules.
Mr Johnson must decide whether the deal on offer is worth taking or the future freedom and domestic political benefits afforded by leaving without one outweigh the economic costs.
A Brexit without a trade deal would damage the economies of Europe, send shockwaves through financial markets, snarl borders and sow chaos through the delicate supply chains which stretch across Europe and beyond.
No Deal?
As EU leaders lined up to warn of the failure of talks, investors started to price in the risk of a chaotic finale to the five-year Brexit crisis.
British stocks fell, euro zone government bond yields fell and sterling fell about 1% against the dollar and euro.
Italian Prime Minister Giuseppe Conte said there were still fundamental issues unresolved in the trade talks. “Time is running out and we need to prepare for a hard Brexit,” he said, referring to an abrupt rupture in trade arrangements.
EU leaders rejected a proposal from Mr Johnson for a Brexit call with German Chancellor Angela Merkel and French President Emmanuel Macron on the 14th December, EU officials said.
Mr Johnson is under pressure from Brexit supporters in Britain not to cave to any EU demands that they say could undermine his promises to regain Britain’s sovereignty.
Mr Macron also faces domestic pressure, with French fishermen urging him to ensure the EU defends their fishing rights.
Asked by a reporter about an EU proposal for a one-year contingency plan, under which EU fishermen would keep access to Britain’s fishing waters, he said: “I’m not asking to have my cake and eat it, no. All I want is a cake which is worth its weight. Because I won’t give up my share of it either.”
The Bank of England said it had taken steps to keep banks’ lending through 2021 as Britain prepares for any market disruption from a big change in the trading relationship with the EU, while also dealing with the COVID-19 pandemic.
Coal projects face 40% premium increases as insurer retrenchment continues
Insurance premiums on coal projects have risen by as much as 40 percent as insurers continue to back away from fossil fuels, making it harder and more expensive to secure coverage, according to survey findings.
EU Tells London Banks, Insurers to Get Used to Limited Access
Britain’s huge financial sector will never again have the same access to the European Union as it did when the country was a member of the bloc, the EU’s financial services chief has said.
Brexit makes it “even more urgent” for the EU to develop its own capital market to cut reliance on the City of London, Europe’s biggest financial centre, Mairead McGuinness said.
Britain’s full access to the EU ends on the 31st December when a transition period which followed Brexit in January expires.
So far the bloc has only granted time-limited UK access for derivatives clearing and securities settlement, to allow for an orderly migration of the activities to the bloc.
Many banks, asset managers and insurers in London have opened hubs in the bloc to avoid disruption to clients from limited direct access from the UK.
Financial services are not part of floundering talks between London and Brussels on a free trade agreement, to which Prime Minister Boris Johnson said on the 8th December that Britain might call a halt without a deal being reached.
“The end of the transition period will lead to significant changes and this will happen whether there is a deal, or indeed whether there is no deal in these coming hours,” Ms McGuinness told an event held by French asset management industry body AFG on Monday evening, the 7th December.
“A third country will never have the same rights and benefits as an EU member,” Ms McGuinness said.
“We also need to regulate, supervise and manage our own risks and our own financial
“Complementarity with the City of London? Absolutely. Reliance? No.”
Press Article: Regulatory risks posed by green shipping are an issue for insurers
Standard Club News
07 December 2020
Year 2020 marked the implementation of the much anticipated global 0.5% m/m sulphur cap regulation, commonly referred to as ‘IMO-2020’.
However, the potential consequences from the fallout of IMO-2020 were overshadowed by the impact of the COVID-19 pandemic.
The pandemic also forced the International Maritime Organization (IMO) meetings planned to be held between March and July 2020 to be postponed and reconstructed on a virtual platform during the latter part of this year, which effectively slowed down the pace of some key work done on the regulatory front.
Read the full article on page 7 of the December issue of Insurance Day, https://www.standard-club.com/risk-management/knowledge-centre/news-and-commentary/2020/12/press-article-regulatory-risks-posed-by-green-shipping-are-an-issue-for-insurers.aspx