Small Business Fleet Insurance – Brexit Questions

We’re already receiving some questions about what Brexit will mean for fleet insurance. So, we’ve decided to put a few thoughts together here.

Do please remember though that we at Alan Blunden Insurance Brokers are experts in things such as small business fleet insurance. We don’t claim to be politicians or economic forecasters!

The current position

At the time of writing, the UK government has just commenced Brexit negotiations with the EU.

This is a process that could easily last another 24 months and might, by process of mutually agreed extension, last even longer. The direct answer then is we don’t know what final Brexit deal will be agreed and right now, it seems unlikely anybody else in Brussels or Westminster does either.

That inevitably means that our direct answer to the question is once again – “we don’t know”.

No direct impact

Many aspects of Brexit don’t, at face value, appear to have much to do with vehicle insurance. As such, our excellent small business fleet insurance products won’t be directly affected by the potentially controversial debates between the EU and UK on subjects such as immigration, the primacy of courts, expat rights and so on.

The by-product economic issues

It’s also doubtful whether vehicle insurance will ever be a direct subject for discussion at the highest political levels.

Any suggestion that UK registered fleet vehicles won’t be able to obtain insurance cover for journeys in the EU seems impossible to believe. Already in the EU today it’s possible to see vehicles from many countries that are not member states including Switzerland, Russia, Ukraine and Norway openly driving on the roads.

So, that looks to be a non-issue and no cause for concern.

It is though conceivable that commercial fleet insurance might be indirectly influenced by the broad background economic debates and particularly the “free-market”.

Whenever trade deals are being negotiated, there is always an imperative for both sides to play hardball to try and get the best deal they can. In almost all cases, common sense prevails and a compromise is reached. However, it’s just about conceivable that if trade talks collapse and a tit-for-tat series of sanctions and penalties are imposed, then indirectly that might affect UK insurance premiums for vehicles travelling into the EU.

It might also affect wholesale insurance costs on the London markets.

Probabilities

This though seems highly improbable. The EU and UK economies are just too important to each other for either side to put the vast trading sums at risk by being unrealistic and starting a trade war.

The idea that German and French vehicle manufacturers will happily accept not being able to sell their cars in the UK or that Scottish Whisky producers will gladly write-off their exports to the EU, seems inconceivable. There are literally hundreds of other such examples too.

So, on balance, the most likely outcome in the arena of trade (and indirectly, small business fleet insurance) is one of little direct change.

Prognosis

True, we still have a long way to go and things can change dramatically. Uncertainty can arise from almost nowhere, as in the case of the recent UK General Election.

We, like everyone else, will be watching events closely. We’ll share our views with you from time to time, as the situation evolves.