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 passports without requiring separate European insurance companies.

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.  Our assumption (subject to any agreement being reached or transitional arrangements being put into place) is that the UK will also not allow EEA insurers to operate in the UK under 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 a formal announcement on Brexit on 11 September 2017.

What is your strategic plan for Brexit?

Our Brexit planning will develop further in 2018 and we anticipate that it could be marked by a series of changes to the Chubb business in the UK and Europe.

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

Chubb further plans to convert Chubb European Group and also ACE Europe Life into Societas Europaea and then if necessary redomicile the companies to France. We are currently working on an operating model where Chubb would continue to have an authorised operation in the UK to write UK risks.

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.

While we continue to monitor political developments closely, our current plans are predicated on having our new structure in place in sufficient time for renewals incepting on 1 January 2019.

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. 
    • Minimising disruption – particularly for our clients, distribution partners and staff.
    • 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.

Chubb further plans to convert Chubb European Group and also ACE Europe Life to a Societas Europaea and then if necessary redomicile the company to France.

We are currently working on an operating model where Chubb would continue to have an authorised operation in the UK to write UK and certain other non-European risks.

The first step, to convert from a Limited (“Ltd”) company to a Public Limited Company (Plc) took place in April 2018.

While we continue to monitor political developments closely, our current plans are predicated on having our new structure in place in sufficient time for renewals incepting on 1 January 2019 ahead of the UK’s expected departure from the EU on 29 March 2019.

Will the change from Ltd to a PLC, or from PLC to an SE be via a Part VII court order??

No, neither CEGL or AELL are carrying out a Part VII process.

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.

Our indication of France as 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?

Chubb currently contemplates locating its EU headquarters in Paris and its UK and regional European headquarters in London. Chubb further plans to convert Chubb European Group Plc (CEG) and Ace Europe Group (AEL) to a Societas Europaea and then if necessary redomicile the company to France.  We are currently working on an operating model where Chubb would continue to have an authorised operation in the UK to write UK risks.

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.

While we continue to monitor political developments closely, our current plans are predicated on having our new structure in place in sufficient time for renewals incepting on 1 January 2019.

How will this impact Chubb clients and business partners?

It is our intention that  if Chubb moves its EU headquarters to France as a result of Brexit, there will be minimal potential disruption to our clients and distribution partners.

Chubb’s Brexit planning is aimed at delivering an effective solution that ensures Chubb and its clients can carry on without disruption when the UK leaves the EU and it becomes necessary to establish an EU headquarters.

Although the UK served a notice under Article 50 in March 2017, it remains a full member of the EU until at least the end of March 2019. Therefore, there is no immediate impact on existing policies, renewals or new policies, including multi-year policies written during this time.

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 clients have the same access as today to underwriting expertise and claims expertise?

One of our key aims is to minimise potential disruptions for clients, distribution partners and staff, and to do so cost effectively. We expect client facing functions to remain where they are now.

UK operations

What will happen to the existing London headquarters?

Post-Brexit, Chubb would 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. This includes potential changes to timing and structure. In this respect, no final decisions have been made.

Minimising disruption is key to our plans also and to the extent possible we are seeking to minimise changes to our operating model and resourcing.

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.

Is it UK 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.