Making the Brexit Transition: Fifth Step Talks to Continuity Insurance & Risk

Amongst those offering post-Brexit guidance is Darren Wray, CEO of business management consultancy Fifth Step and author of The Brexit Readiness Guide who was talking to Continuity Insurance and Risk magazine. He notes that companies in sectors such as financial services aren’t deterred by uncertainty, but have commenced preparations prompted by the Bank of England’s stress testing and Brexit readiness regulations.

Some insurers are incorporating in Europe, with Lloyd’s establishing a Brussels office and Chubb expanding its European head office in Paris. AIG is creating two new firms – one UK-based, the other in Luxembourg. The latter, AIG Europe SA, includes 19 branches across Europe and will continue to underwrite European risks, while AIG UK covers UK-based risks. The insurer will launch the new structure in December.

“What companies have been less good at is looking for the advantages presented – what new lines of business will be required post-Brexit?” asks Wray. “Will there be opportunities for businesses to find – and will they need – different vendors in different geographies? There’s still little evidence of organisations pitching for this type of business as they’re unsure what type of Brexit we’re going to have.”

Wray recommends risk managers employ a five-point plan in preparing for the post-Brexit era, which seeks to identify what you’re protecting against and the challenges your company may face.

Questions may include:


1. How would business be impacted if you lost the same access to staff from other EU countries?
2. What would happen if you couldn’t sell products and services to the EU without additional tariffs?
3. Is your market position such that companies would pay more for your products or services?
4. What if the raw materials your business sources from the EU become more expensive due to import tariffs?
5. What if your EU-based vendors charge more because of tariffs?

Score and prioritise:
Walk through each risk giving each a score of low, medium or high impact should the risk become a reality. The chief information officer (CIO) will be involved here as the holder of data.

Mitigation planning:
The CIO and team should work closely with all parts of the business. Starting with those with the highest risk score, provide at least one mitigation action that could reduce the risk. Include as much detail as appropriate, spending less time on risks less likely to happen.

Identify opportunities:
This stage adds structure for those that began the process from the early stages of Brexit and an opportunity for those who haven’t started to make that change. It’s an ideal stage for innovative CIOs to add value and to demonstrate their value as they work with their C-suite and board colleagues, as well as with the wider business.

Monitor and review:
The monitoring and review cycle ensures projects run to plan and have the resources required. It monitors the progress of Brexit discussions and ensures any change in assumptions or risk assessment is monitored – while nimble and astute organisations can use it to identify new opportunities.