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Brexit challenges and opportunities for the profession

Over the past year, the IFoA’s Council has considered the potential for Brexit to impact the IFoA, actuaries and the industries in which they work. These challenges and opportunities are summarised below.

Managing macroeconomic effects

  • No Deal: Most sources predict that a ‘No Deal’ Brexit will have an immediate negative effect on the UK economy, potentially causing a shrink in UK GDP.
  • The Deal:  A managed Brexit is predicted to lead to a smaller negative impact on the UK economy following withdrawal

Trade relationships with EU and non-EU countries 

  • No Deal: With no new trade agreement with the EU, the rules of the World Trade Organisation would apply. Mutual recognition and access to the single market would end, necessitating a new regime, however the UK Government has indicated it would accept some European Union rules allow EU firms to operate in the UK for up to three years.  
  • The Deal: The Government aims to secure the freest and most frictionless trade possible in goods with the EU outside the single market via a new free trade agreement. Mutual recognition of professional qualifications would continue, but importantly  services will not be included in the new customs arrangement.

Maintaining high regulatory standards while encouraging innovation and growth   

  • No Deal: The UK would cease to be a member of dozens of regulatory agencies that govern many aspects of daily life. It will be particularly challenging for the UK to assume this responsibility all at once if a 'no deal' scenario also means that there is no transition period.
  • The  Deal: There would be regulatory arrangements for financial services, but these would not replicate the EU's passporting regimes (which enables authorised EU firms  to trade freely in any EU state), meaning that the UK and the EU will not maintain current  levels of access to each other's markets.

The impact on actuaries and their employers

  • No Deal: The UK government has indicated it intends to secure the rights of EU citizens living in the UK under a 'no deal' Brexit scenario. The rights of UK citizens living in the EU have not yet been guaranteed. Members would experience significant disruption while new regimes were put in place, including mutual recognition of qualifications and working cross-border.
  • The  Deal: While an agreement will limit the immediate effects of a Brexit on the profession, the end of passporting, the lack of regulatory equivalence, and freedom of movement are potential challenges.

We will continue to monitor and react to the opportunities and challenges that Brexit presents.

 

Contact Details

Policy Team

policy@actuaries.org.uk

IFoA, 7th Floor, Holborn Gate, 326 – 330 High Holborn, WC1V 7PP

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