Insurer may have to revise approach for about £500m in premiums sourced from the EU

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Shares in QBE fell almost 7% yesterday after the insurance giant said it may have to revise its approach to business in Europe following the Brexit vote in the UK.

QBE said the referendum outcome may affect about £500m ($665m) of insurance and reinsurance premium that it currently sources from EU member countries.

These premiums are currently written via its UK branches that are allowed to operate in Europe under the current EU passporting rules.

“Should EU passporting rules not be preserved, QBE will be required to renew this business into newly established licensed EU entities,” it said in a statement yesterday.

But the insurer said it does not expect any material impact on daily insurance operations despite Brexit.

The UK’s exit transition timetable from Europe is expected to take at least two years.

QBE said: “This period provides ample time for any requisite administrative transition and to ensure our service commitments to QBE’s European customers are uninterrupted. Thus our ability to source business from EU member countries remains unchanged.”

For the year ended 31 December 2015, QBE reported GWP of $15,092m, of which $4,386m was generated from its European operations.

QBE is one of four listed Australian insurance companies expected to be hit by Brexit.

Investment bank Credit Suisse listed QBE as well as IAG, Medibank and Suncorp as being among 25 big Australian stocks expected to be affected by the news.