OLDWICK, N.J.--(BUSINESS WIRE)--In this A.M.BestTV episode, Catherine Thomas, A.M. Best senior director-analytics, discusses how the post-Brexit financial market volatility leaves the United Kingdom (U.K.), and in particular, European life insurers, more vulnerable. Click on http://www.ambest.com/v.asp?v=brexit716 to view the entire program.
In the June 23 referendum, 52% of U.K. citizens decided to relinquish the U.K.’s European Union membership.
“A.M. Best does not expect to take any rating actions in the near term as a direct consequence of the decision,” said Thomas. “However, the financial market’s volatility, which followed the decision, is likely to have an impact on insurers’ half-year results and balance sheets as equity market volatility is expected to persist.”
Thomas also believes that life insurers are more vulnerable to the effects of financial market volatility.
Looking to the future, Thomas said, “In the longer term, the uncertainty created by the decision and the effect on investors and consumer confidence is likely to slow economic growth with negative implications for both revenue and profitability prospects for U.K. insurers.”
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