The Motor Trade Insurance industry is set to be in a good position post Brexit. Large insurers, who underwrite these policies, have been lobbying government to represent their interests during the negotiations.
Many insurers have released statements confirming they are striving for business as usual. The insurance industry in the UK is also represented by many trade bodies, such as BIBA, who are also working hard to secure a good deal for motor trade insurance brokers and their customers.
However even with an optimistic outlook, concerns remain. Recently many people have witnessed the hike in their personal car insurance premiums as a result of government changes. Increases in the cost of car insurance have been widely reported across all main Media outlets. This was a result of an increase insurance premium tax rate, from 10 to 12%, costing £47 a year more on average for each family.
Looking at how such a small change, increases premiums so steeply, it can paint a bleak outlook for post-brexit costs. As such many are inevitably considering how the constitutional changes that come with Brexit Will inevitably have an effect on their insurances cost.
The most significant policy change that will affect the insurance industry post Brexit is the end of passporting, and presently a lack of understanding within the insurance industry about how this challenge will be overcome. This is the legislation which enables a firm authorised in the EEA to perform activities related to insurance cross borders. Even prior to Brexit, one of the largest members’ organisations for insurance brokers, BIBA, raised concerns about the end of passporting to its members. They asked their members to use their vote wisely for the for the security insurance industry, keeping in mind the projected end of passporting, and the challenges of renegotiating an alternative.
Post Brexit agreement of passporting is still very much undecided as political parties are debating soft and hard Brexit. However this is unlikely to be the biggest impact on truck fleet insurance customers. It is reported that the effect, for more specialist insurers, will likely be less significant. So as a niche insurance sector where most of the underwriting is conducted on a national basis, the likelihood of this having a significant impact is minimised. However the increase in inflation predicted post-brexit is likely to make a significant impact on all areas of business.
Some insurers have hinted that some of their insurance premiums may increase because of inflation. But more significantly, the increasing cost of imports, caused by rising inflation will be significant. The cost of repairing cars may be a hidden cost that causes an increase in motor trade insurance premiums. If insurers need to cover the cost of higher claims, the cost of the policy is likely to increase as underwriters will need to cover this risk. As Britain is already experiencing a notable rise in inflation, this consequence of Brexit has begun already as the result of the scheduling of impending negotiations.
There will be many challenges for fleet owners in a post Brexit Britain, in particular for businesses with international operations. The concerns range from needing specific insurance to drive abroad, to health insurance for their drivers in a post European healthcard world. Recently parallels have been drawn between how the borders are in turkey, and how the British borders might look. Despite this fleet managers are remaining positive about the future of their businesses. A survey by BT showed that 55% of fleet managers felt positive about the decision to leave the EU.
Across all sectors there has been an abundance of post Brexit predictions and the insurance industry is no exception. Unfortunately there are many variables, and it is impossible to know how the motor trade insurance industry will look post Brexit. Some might be finding it frustrating with the lack of uncertainty. But one certainty is that brokers across the UK will strive to work for a smooth transition for all truck fleet insurance customers. They will continue to work to keep clients well informed on any incoming legislation that may influence their businesses.
Luckily with Truck Fleet insurance being such a competitive market place, and there being so many businesses operating in this sector we are still likely to see great deals on cheap truck Fleet Insurance. However as with businesses in all sectors, motor traders and transport companies will need to stay vigilant when forecasting for their businesses now that Article 50 has been triggered.