For example, the supply of niche insurance products may reduce or end altogether, given the increased costs and frictions of serving EU customers from the UK. Finally, Brexit is not the only uncertainty that we face. To touch on three others: 1. Firstly, the effects of climate change, in the form of more frequent and severe storms, floods and droughts, have already affected insurers.
Further increases in the number and severity of disruptive climatic events look certain. Furthermore, as the Governor of the Central Bank recently remarked10, the financial system (including the insurance industry) has a crucial role to play in the transition to a lower carbon economy. 2.