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Globalization has truly taken the world by storm – international trade is more prevalent now than ever. The same rings true for services – cross border transactions and information zip across the world at moment’s notice. And while you may think certain industries are unaffected by globalization, this simply isn’t the case.

One market that is increasingly impacted by the global market is insurance. And while you may not care, it will have an impact on your premiums at the end of the day. If you want to understand why fluctuations in premiums occur, it’s often important to look at the global market. In this article, we’ll take a look at some issues global issues impact British insurance.

Connectivity

At the end of the day, most of the major insurance companies and underwriters that you source your auto insurance from have an international presence. This means they will have offices on almost every continent of the globe. The insurance industry has grown so large that the major players have the power to influence markets around the world.

This means that the company you’re sourcing your policies from will typically be pulling revenue from multiple countries and jurisdictions. If bad decisions are made in one jurisdiction, the entire company may have to make up for it. This means that companies will offset their losses by raising premiums across the board, or taking other measures.

Recently, many Western insurance companies have seen a decline in their business in China. This means they have had to readjust their scope and profit goals in other locations.

Regulation

Another reason connectivity impacts the British auto insurance market comes down to regulation. Different countries have different rules on how you are allowed to operate. These rules are constantly shifting and result in the insurance industry having larger and smaller costs and time goes on. These changes impact the viability of the company, and may affect premiums across borders.

In addition, events such as Brexit mean that the insurance industry in the UK will be changing. Eventually, the EU regulations on insurance will no longer be valid in Britain – meaning we may see a huge shift in insurance regulation over the next few years.

Large Claims

If a natural disaster occurs, or a particularly large claim comes into play, this might impact the British auto insurance industry regardless of where the event or claim occurred. We’re seeing this right now with the recent natural disasters that caused huge claims throughout 2017. While most of these events occurred outside the UK, domestic premiums are rising as a result.

Verdict

As you can see, there are plenty of ways the global insurance market and global economy impact the British auto insurance industry. The role of the rest of the world is now more important than ever for services in the UK. If you want to keep up-to-date with the British auto-insurance industry, it’s important to keep up-to-date with the world’s economy.

For more information about British auto insurance, check out some of the other interesting blogs on our site!