Pondering Brexit

WITH THE EU REFERENDUM AROUND THE CORNER RISK AND INSURANCE MANAGERS ARE PONDERING HOW A POTENTIAL BREXIT COULD IMPACT THEIR BUSINESS.

The anticipation is building and both camps have upped the ante in their arguments for and against remaining in the European Union. Come 23 June the great British
public will decide. If the outcome is against staying in the EU, UK based organisations will need to adapt to the implications this presents them, from the impact on trade and investment channels
to the prospect of London being dislodged as ones of Europe’s leading financial centres.

Inevitably there are many unknowns associated with a Brexit scenario, and the situation is not going to change overnight, explains Julia Graham, deputy CEO and technical director for Airmic. However, she thinks businesses should be “future-gazing” in order to think through the various scenarios. “It is a slow burner,” she says. “When the UK makes its decision it isn’t suddenly
you’re in Europe one minute and you’re outside it the next minute.

Only the bigger companies and those with international interest and complex supply chains have started thinking in depth about what they might do if Brexit happens – we think some just aren’t yet getting their heads around it at all. Of course, they will all start to plan when they know what the answer is – and don’t assume nothing will change if vote is “yes” to stay in Europe – this should
be included in scenario analysis. “

“ At DLA Piper we were thinking about this subject long before I retired from the firm in October,” she continues. “We were considering what this might mean in terms of the freedom and flow
of people, business and accounting…and how we maintain excellent continuity of service for our clients.”

The other more intangible aspect of Brexit is the uncertainty and unpredictability it presents. Even in the run-up to the vote there has been a sense that “everything has been on hold”, says
Charles Hecker, global research director at Control Risks. Such uncertainty could continue should Britain vote to leave the EU, particularly during the bedding-in period as business and government
makes the necessary adjustments.

If Brexit is indeed a reality, the “government on almost every level is going to be so taken up with this issue for the next few years that the normal day-to-day flow of governmental affairs
and legislative business will be severely impacted as we work out our new relationship with the EU,” thinks Hecker. He adds, however, that Control Risks is forecasting the vote on 23 June will be in favour of remaining within the EU.

Even if he is wrong, it is not all doom and gloom. Where some see risk, others are considering new prospects. “There are plenty of British businesses out there that would consider Brexit as an opportunity,” thinks Graham. “So it’s important to look at it through both lenses.”

June 2016