Brexit

Brexit FAQs - how it could affect our brokers

Brexit Background

Why is Brexit Contingency Planning needed?

Chubb European Group and ACE Europe Life are currently authorised in the UK. As the UK is part of the EU single market this allows these entities to operate in all EEA countries under its UK permissions without requiring separate European insurance companies or authorisation.

After Brexit, it is uncertain that the UK will continue to have access to the European market and unlikely that the UK will be able to passport into the EEA.  This means that CEG and AEL will no longer be able to undertake regulated activities in the EEA without obtaining EEA permissions.

The UK served a notice under Article 50 in March 2017 which kick-started a minimum two-year period for negotiations and Brexit is due to take place on 29 March 2019.

Chubb’s Brexit contingency plan is intended to allow Chubb to (i) continue writing business following Brexit in all of the territories it currently operates in; and (ii) administer existing business, in each case in the event that the UK leaves the EU without any arrangements on passporting being agreed.

Our Brexit plan

When did Chubb announce its Brexit plan?

We made an initial formal announcement on Brexit on 11 September 2017.

We have also communicated our plans to brokers and relevant third parties to inform them of our strategy and key milestones.

What is your strategic plan for Brexit?

In July 2018, Chubb European Group and ACE Europe Life converted to Societas Europaea (SE). They are now known as Chubb European Group SE and ACE Europe Life SE.

Also in July, Chubb received authorisation from the Board of the French regulator Autorité de Contrôle Prudentiel et de Résolution (ACPR) so Chubb European Group SE and ACE Europe Life SE can re-domicile to France on 1 January 2019. This is subject to Chubb fulfilling certain administrative requirements by the end of 2018.

Until 31 December 2018, Chubb European Group SE and ACE Europe Life SE will still be domiciled and have their registered office at the same address in England and will remain authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. 

From 1 January, 2019, the new registered address for Chubb European Group SE and ACE Europe Life SE will be La Tour Carpe Diem, 31 Place des Corolles, Esplanade Nord, 92400 Courbevoie, France. 

From 1 January, 2019, Chubb European Group SE and ACE Europe Life SE will be supervised by the ACPR, 4 Place de Budapest, CS 92459, 75436 PARIS CEDEX 09 and operate in the UK – initially at least – as an EEA branch.

An SE is a public company registered under EU corporate law and formed in accordance with the law of the Member State in which it has its registered office. SE status enables Chubb European Group and ACE Europe Life to redomicile to another EU jurisdiction – France – and continue to undertake business both around the EU and into the UK.

Customers will benefit from continuing to receive insurance cover from the same legal entity with the same level of capital. In addition there will be no change to the level of customer service.

Specifically, for UK customers this means contract certainty and certainty of insurance cover. The French companies will operate in the UK under passporting rules until Brexit or expiry of any transition period. After that time and if required, Chubb intends to seek authorisation of the branches of its French companies in the UK. In the event of a ‘Hard Brexit’ where no transition period is agreed between the UK and EU, Chubb’s UK branches will benefit from the UK government’s temporary permissions regime. This regime will enable firms like Chubb to undertake new business within the scope of their permission, enable them to continue performing their contractual rights and obligations, manage existing business and mitigate risks associated with a sudden loss of permission.

For customers based in the EU there will also be no disruption as the French authorised business for Chubb European Group SE and ACE Europe Life SE will be able to passport across the EU. This means there will be no complicated portfolio transfers or changes in insurers which might otherwise be experienced.

We anticipate that these changes will allow us to continue to benefit from the S&P “AA” rating assigned to core operating companies within the Chubb Group.

What are the key drivers for Chubb’s Brexit contingency plan?

There are two key drivers behind Chubb’s Brexit contingency plan:

  • Regulatory concerns - we need to ensure that post-Brexit we have all necessary regulatory authorisations to continue to operate our business in the jurisdictions we currently operate in.
  • From the outset, our primary aim has been to ensure a seamless transition and to offer certainty and continuity of service for all our customers and our business partners, regardless of location or the final outcome of the Brexit negotiations.

Many other factors were also considered including timing –  our ability to deliver the plan prior to the expected date of Brexit (March 2019).

What are the key staging points and dates in the proposed Brexit process?

Chubb currently contemplates locating its EU headquarters in Paris and its UK and regional European headquarters in London.

  • In April we converted from a Limited (“Ltd”) company to a public limited company.
  • On 19 July 2018, Chubb European Group and ACE Europe Life converted to Societas Europaea (SE). They are now known as Chubb European Group SE and ACE Europe Life SE.
  • On 11 July 2018, Chubb received authorisation from the Board of the French regulator Autorité de Contrôle Prudentiel et de Résolution (ACPR) whereby Chubb European Group SE and ACE Europe Life SE will re-domicile to France on 1 January 2019. This is subject to Chubb fulfilling certain administrative requirements by the end of 2018.
  • Until 31 December 2018, Chubb European Group SE and ACE Europe Life SE will still be domiciled and have their registered office at the same address in England and will remain authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
  • From 1 January, 2019, the new registered address for Chubb European Group SE and ACE Europe Life SE will be La Tour Carpe Diem, 31 Place des Corolles, Esplanade Nord, 92400 Courbevoie, France. 
  • From 1 January, 2019, Chubb European Group SE and ACE Europe Life SE will be supervised by the ACPR, 4 Place de Budapest, CS 92459, 75436 PARIS CEDEX 09 and operate in the UK – initially at least – as an EEA branch.

France

Why France?

Our preferred location of France was clear and straightforward.

Chubb has a long-established, vital presence in the French market, with more than $500million in gross premium and several hundred employees serving businesses of all sizes, as well as a vibrant consumer market in which we offer a wide range of products.

Paris is also the principal office for our Continental European operation, allowing us to capitalise on the management and staff already present in the city as we build our EU headquarters.

Choosing France reflects our preferred location  reflected our existing strong commitment both to the French market and the larger European market.

In considering France as the future home of our legal entity, we worked closely with the ACPR, the French regulator, and we have established a good working relationship with them.  In addition, the French government has and continues to be actively supportive at the most senior levels.

Chubb post-Brexit

How will Chubb’s Brexit plans work in reality?

Until 31 December 2018, Chubb European Group SE and ACE Europe Life SE will still be domiciled and have their registered office at the same address in England and will remain authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Chubb European Group SE and ACE Europe Life SE will re-domicile to France on 1 January 2019. This is subject to Chubb fulfilling certain administrative requirements by the end of 2018.

From 1 January, 2019, the new registered address for Chubb European Group SE and ACE Europe Life SE will be La Tour Carpe Diem, 31 Place des Corolles, Esplanade Nord, 92400 Courbevoie, France. 

From 1 January, 2019, Chubb European Group SE and ACE Europe Life SE will be supervised by the ACPR, 4 Place de Budapest, CS 92459, 75436 PARIS CEDEX 09 and operate in the UK – initially at least – as an EEA branch. 

An SE is a public company registered under EU corporate law and formed in accordance with the law of the Member State in which it has its registered office. SE status enables Chubb European Group and ACE Europe Life to redomicile to another EU jurisdiction – France – and continue to undertake business both around the EU and into the UK.

Customers will benefit from continuing to receive insurance cover from the same legal entity with the same level of capital. In addition there will be no change to the level of customer service.

Specifically, for UK customers this means contract certainty and certainty of insurance cover. The French companies will operate in the UK under passporting rules until Brexit or expiry of any transition period. After that time and if required, Chubb intends to seek authorisation of the branches of its French companies in the UK. In the event of a ‘Hard Brexit’ where no transition period is agreed between the UK and EU, Chubb’s UK branches will benefit from the UK government’s temporary permissions regime. This regime will enable firms like Chubb to undertake new business within the scope of their permission, enable them to continue performing their contractual rights and obligations, manage existing business and mitigate risks associated with a sudden loss of permission.

For customers based in the EU there will also be no disruption as the French authorised business for Chubb European Group SE and ACE Europe Life SE will be able to passport across the EU. This means there will be no complicated portfolio transfers or changes in insurers which might otherwise be experienced.

We anticipate that these changes will allow us to continue to benefit from the S&P “AA” rating assigned to core operating companies within the Chubb Group.

How will this impact Chubb customers and business partners?

From the outset, our primary aim has been to ensure a seamless transition and to offer certainty and continuity of service for all our customers and our business partners, regardless of location or the final outcome of the Brexit negotiations.

Will this affect Chubb’s credit rating?

We anticipate that these changes will allow us to continue to benefit from the S&P “AA” rating assigned to core operating companies within the Chubb Group.

How will any new post Brexit operational flows ensure that customers have the same access as today to underwriting expertise and claims expertise?

Our primary aim has been to ensure a seamless transition and to offer certainty and continuity of service for all our customers and our business partners, regardless of location or the final outcome of the Brexit negotiations. We expect client facing functions to remain where they are now.

UK operations

What will happen to the existing London headquarters?

Post-Brexit, Chubb will continue to have a substantial presence in London which will remain its Regional European headquarters.

What if

Would transitional arrangements change your plans?

Chubb’s Brexit contingency planning is based on a Hard Brexit and we have to plan for the loss of passporting.

Our plans have been developed around having maximum flexibility for as long as possible and we will continue to be adaptive and respond to Brexit terms.

What does Chubb look like now

In the London Market, what is the legal form of your company currently?

Chubb’s primary operating entity in Europe is Chubb European Group (CEG) and ACE Europe Life  (AEL). CEG and AEL are UK registered companies which are currently authorised by the PRA and regulated by the FCA and PRA.

Are your companies domiciled or a branch of another entity?

CEG and AEL are headquartered in the UK with branch offices across Europe. CEG, AEL and its EEA branches hold cross border permissions throughout the EEA.

Looking ahead

What are the key staging posts and dates?

Chubb’s current plans are predicated on having our new structure in place in sufficient time for renewals incepting on 1 January 2019.