What: Shares in QBE Insurance Group Ltd (ASX: QBE) are trading around 6.5% lower on Monday morning as investors continue to assess the implications of the 'Brexit' vote which could see Britain leave the European Union.
So What: QBE's share price has now lost over 10% in the past two trading sessions, highlighting the concerns the market has regarding the insurance giant's significant exposure to both the UK and the wider European region, which tallied up account for roughly 30% of the group's gross written premiums.
QBE's management has been quick to quell investor concerns with the insurer issuing a 'Response to United Kingdom Referendum Outcome'. The release included the following details:
"The referendum outcome may require a revised approach in relation to approximately GBP500 million of insurance and reinsurance premium that QBE currently sources from EU member countries that is written via branches of UK regulated entities under 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."
Now What: While a UK exit from the EU looks likely, it is not yet a certainty. It also is likely to take years to fully unravel the intertwined economies which provides plenty of time for an orderly transfer of business operations for QBE.
In fact, QBE's announcement noted that the group "does not anticipate any material impact on our day to day insurance operations", which could lead some investors to view the near term volatility as providing a long-term buying opportunity.
