European executives in the UK and their continentally-based British counterparts worried about their fate when the country leaves the EU are being offered the chance to take out “Brexit insurance”.
AIG, the US-based insurer, will this week launch an add-on to its directors & officers liability coverage that will add various costs associated with Brexit to its insurance.
The new terms include help for EU nationals wanting to become permanent residents in the UK. If their applications for residency are rejected, AIG will cover the costs of a legal challenge.
AIG will also cover the legal costs of a challenge to a repatriation order and, if the challenge is unsuccessful, the insurer will also pay for repatriation costs.
The cover will also apply to UK nationals living in the EU.
“While the outcome of the discussions between the UK and the EU are unknown, this addition to existing cover, which will be implemented at no additional cost, will give our clients peace of mind during a period of potential change,” said Anthony Baldwin, chief executive of AIG’s UK and European businesses.
The post-Brexit status of EU nationals living in the UK is still unclear. During her campaign for the leadership of the Conservative party, Theresa May initially said that EU citizens in the UK would be “part of the negotiation” on Brexit, although she later softened her stance.
Foreign secretary Philip Hammond this month called for a quick resolution to questions over what will happen to EU citizens living in the UK and British citizens living in the EU.
Nevertheless, AIG says that some EU expats are already seeking permanent residency in the UK so that they can continue to live in the country once it leaves the EU, regardless of the outcome of talks between Brussels and Westminster.
Since the referendum last month, the insurance industry has been trying to work out how to contain the potential damage that the UK’s exit from the EU could cause. Across the City, insurers and their lawyers are studying which legal structures will allow them to continue serving European clients from their London bases.
Increasingly, though, the industry is also seeking to turn the risks that Brexit poses into a business opportunity.
“The Brexit situation creates challenges but also opportunities. It generates complexity . . . and as a broker it is our role to support [clients] in this,” said Nicolas Aubert, head of broker Willis Towers Watson’s UK business at an event organised by trade publication Insurance Day this week.
Source: Financial Times
Date: 28th July, 2016