Biba Scotland: Uncertainty in the country

Scotland flag

Graeme Trudgill, head of corporate affairs at the British Insurance Brokers’ Association (Biba), has listed the five “huge, huge” issues that brokers in Scotland could be faced with in the event of a 'yes' vote for independence.

Mr Trudgill, while not expressing an opinion for or against Scottish independence, told the audience at the Biba Scotland conference: "We think that a different regulator for Scotland could be a huge concern," before turning to potential complications on policy wordings, tax, currency and access to markets.

"The policy wordings [written] in English law could change with issues there," he cited, along with raising the topic of what a different tax regime would mean for insurance premium tax (IPT). He continued that "the impact of income tax is going to be about cross-border sales."

Loss of markets
Mr Trudgill accepted that no-one yet knew what would happen should Scotland choose a separate currency but that "the most important thing is the losing of markets."

"If a small insurer is trading in England are they going to want to make [new arrangements]?" he asked.

"We have members who have products on comparison sites in England.

"In fact, 70% of their products could be sold in a different country, how is that going to work?"

The debate around the potential impact of devolution on brokers based in Scotland was developed in a separate panel discussion later in the event held at Airth Castle Hotel near Stirling.

Chaired by Biba's chief executive, Eric Galbraith, the panel discussed whether brokers had seen any impact from the devolution debate and if uncertainty around it was affecting their business.

Glen McLellan, branch manager at Senior Wright told the audience that the impact was "too far in the future" to assess fully but added: "I don't know how we could self-regulate in Scotland, I don't think it is feasible."

For his part, John Nicholson, risk and governance director at Marsh, said businesses were already hedging on investment and that, if devolution occurred, any departure by companies who had invested in the country from abroad "would be disastrous".

"I think at the moment there is a great deal of uncertainty and there is very much a downside. That is linked to the future of the Scottish economy and part of that will be what happens to tax?"

He added: "If tax raising becomes a real issue then IPT may become one...There would be distinct benefits from getting to a point of certainty."

Brendan McManus, chief executive officer at Giles Insurance Brokers and deputy chairman, of Biba highlighted that his business was still investing in Scotland and recruiting in every one of its 11 offices but that he had seen evidence of uncertainty impacting on clients and brokers.

"It needs clarifying or I think Scotland could go on hold for a couple of years and that would be very bad for us as a business," he noted.

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