Column: Roger's Soapbox

Project Fear Prevents Change

By: | April 4, 2016 • 2 min read

Roger Crombie is a United Kingdom-based columnist for Risk & Insurance®. He can be reached at [email protected]

On June 23, the British will vote in a referendum on whether to remain in the European Union. It is impossible to say whether staying or leaving offers better options for the future of Britain, Europe or the world. That’s because of an immutable law of nature: The future is unknowable.

Months of scaremongering from governments (British, European and American), business leaders who feel threatened by change, and omniscient TV chefs (!) have laid it on thick. Their combined efforts are known as Project Fear. Outside the EU, they insist, Britons would wither and die. That’s arrant nonsense. Or it’s true. No one knows.

Yet I can tell you with absolute assurance that Britain will remain in the European Union.

The insurance industry doesn’t like uncertainty — it’s certain about that.

That’s not the blind assumption of the continuation of the status quo speaking. That’s pure cynicism from one who wants out. If a majority votes to leave Europe, a second vote would be held, and as many more as it takes until the voters do as they’re told.

The British insurance industry is for staying in, because it believes continued membership would serve the industry’s best interests. That’s not an indictment. Turkeys don’t vote for Thanksgiving.

Insurers based in Britain are currently free to insure their brains out in all the European member countries, thanks to a passporting program. Their business would become more administratively cumbersome without it.

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The insurance industry doesn’t like uncertainty — it’s certain about that. Thus, the next few months will cause greater anxiety than would a result either way. It’s much the same when one is pursuing a potential lover. “No” is better news than “maybe.” With a “no,” one may proceed to the next candidate. With a “maybe,” it’s how low can you go: limbo time.

Until June 23 or possibly later, the British insurance industry will be in limbo. So much so that Lloyd’s, under Hiscox’s leadership, plans a simulated catastrophe test later this year (not based on a Brexit) in order to ensure that people stay awake.

Reports state that few British companies have prepared for an exit from the EU. The British government certainly hasn’t. Civil servants are improperly denying information to elected members of the government who want to leave the EU.
Bottom line: After months of destabilizing debate, nothing will change.

Insurers, like the rest of us, will keep their European passports, and in time Britain will become little more than a northern satrapy of Brussels.

How long that arrangement might last is unclear. The EU (and its currency, which Britain has already rejected) is a slow-moving catastrophe, and may crumble under the weight of its own pretensions, regardless of Britain’s decision.

If that happens, those of us who want out of the EU are going to want out of the solar system. &

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