The United Kingdom’s (UK) Brexit referendum was one of the most important events in the history of European Union, and in the history of UK’s relationship with the rest of Europe. For the first time in a generation there is a serious prospect of a member state leaving the European Union (EU). In Britain the Conservative government, led by the Prime Minister David Cameron, was committed to holding an in-out referendum by the end of 2017. But due to various geopolitical developments the referendum was eventually held on 23^rd June.

If the UK leaves EU the impact would depend on the new relationship between UK and EU. We consider five models. The Norwegian-style European Economic Area agreement, Turkish Style customs union, Free Trade Agreement based approach, Swiss style bilateral accord and Australia type Most Favoured Nations based approach.

A great deal has now been written on the economic consequences for the UK of Brexit. Some of this is impartial; much of it is partisan. Very little has been written on the consequences for the rest of the EU.

This paper seeks to address this gap by systematically assessing the evidence on the impact of Brexit on both the UK and the rest of Europe.

At the heart of this analysis are various channels of impact. This is a very important question for the insurance industry at the moment as there is currently a lot of debate over the future of the UK’s place within the EU. If the UK exits the EU as decided by the referendum, insurers will have to weigh up the benefits against the disadvantages and make a decision on where their business would see the most value. Where they decide to base themselves in future could have significant impact on the performance and operation of their business.

The aim of this paper is to determine how the UK's decision to remain in or leave the EU will affect insurers’ decisions on where to base their operations in future and the impact of immigration on the UK, by evaluating the following:

• The relationship between the EU, the UK and insurers; and the impact of that relationship on insurers globally.
• The opinions expressed in the media regarding the UK leaving or remaining in the EU and how this impacts insurers.
• The views of key industry informants to corroborate the media’s reporting.
• Various statistical models by analysis of data from ONS UK, Labour Force Survey.

This paper has been prepared based on our interpretation of the politics of Brexit and our analysis of the best available economic evidence. The uncertainty of the UK business, the strategic dynamism and political contagion are the three most important factors that will mould EU in future.