The Intelligent Quarterly from the publishers of The Insurance Insider

Winter 2017

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Sorry about that!

Mark Geoghegan

When I first visited Germany I was amazed by the extraordinary phenomenon of being apologised to for the Second World War.

I couldn't believe that some older members of the German population felt the need to say sorry to me personally for the events that had ended 24 years before my birth.

I was completely unprepared and it was disconcerting to hear expressions of sorrow and regret for something that had nothing to do with me or anyone in my generation.

What is one supposed to say?

My typical British instinct to immediately respond: "Oh, thanks, that's quite alright" seemed a little frivolous.

Eventually I perfected a more sober and thoughtful reaction, acknowledging and thanking the apologist's sincerity.

Then a few years later in a coastal town in Normandy a spritely French 90-year-old saw me get out of a GB-plated car and thanked me with three passionate Gallic kisses - again for the mere fact of my being British and a possible descendant of the liberating Allied armies of 1944.

I expect such greetings will die out as the last of that most troubled generation does the same.

But multiple decades of undeserved apologies and thanks just for being a loyal subject of her majesty Queen Elizabeth II is pretty amazing going.

It made me think.

I wonder how long into the future my children and I will have to apologise for Brexit?

Probably until after I die. I assume.

Brexit is pure politics and emotion. Logic, reason and a careful analysis of the facts were nothing to do with it:

The UK says it wants to go it alone outside the EU, but then wants the deepest and freest possible trading relationship with its old partners.

It says it wants to be a global beacon of free trade but to do so is leaving the world's largest free trade area whose single market it helped design.

It says it wants to regain sovereignty from Brussels and Strasbourg, yet the global trade deals it seeks will all need supra-national judicial mechanisms that have to be able to override individual governments if they are to work properly.

In insurance terms it is all pretty contradictory too.

The European free market in insurance works well and UK has just expensively implemented the biggest solvency regime changes for a generation - all to an EU template.

Meanwhile, Brexit will occur just as a covered agreement between the US and the EU will start to bring the world's two largest insurance markets together in mutual recognition.

Guess who did most of the heavy lifting on that one? The UK of course!

A desperate scrambling to restore the status quo is occurring as the UK establishment looks to remove the bullet it has shot into its foot.

There is no obvious net benefit to any of this, only net negatives as the frictional cost of doing business across Europe inevitably rises, just at a time when costs are under severe pressure across the board.

Perhaps the commitment to opening genuine EU subsidiaries will be the stimulus for UK firms to finally try and make the most of all the free EU insurance market has to offer?

After all, it is an area they have consistently neglected in favour of English-speaking trade up to now.

Maybe.

But until that day comes it will be: Sorry, desolé, es tut mir sehr leid for Brexit.

This article was published as part of issue Spring 2017

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