At the early stages of developing a company, we often rely on the old business school favourite- the SWOT analysis. For an Irish startup in 2016, across both goods and services, it’s hard to identify a greater opportunity than the European free market and a bigger threat than Brexit. 12 months ago, my business partner Stephen Curtis and I established DFI Consulting – a niche commercial insurance brokerage – with the aim of introducing a range of innovative new insurance products for Irish business owners.
Any time you enter a mature market, possibly even one that has stagnated since the financial crisis of 2008-2013, you have to bring new ideas to the table and take advantage of technological advancements to strip down the old business model and drag it from paper files to the cloud.
Cross Border Product Development
The first thing we did was study the UK, our neighbour and largest trading partner, to see what products were successful in that market but currently unavailable in Ireland. The main one that struck a chord with us was Personal Guarantee Insurance, the ideal product to mitigate commercial borrowing risk. As owners of an early stage business, we could immediately see the benefit in paying a premium to protect our personal assets while accessing credit to fund the early development of the company. The product was developed by Ratae PGI, a UK based insurance product developer and underwritten by Elite Insurance in London.
A quick flight from our offices in Dublin to the City of London to discuss terms with the product provider followed and a deal was struck. Two Irish business owners, travelling on a Ryanair flight – a company who have seen unbridled success on the back of EU open markets – to London for a meeting with a UK based company to discuss a mutually beneficial deal without any unnecessary barriers or red tape to deal with. This is the backbone of the EU success story- freedom to start companies easily, availability of credit and access to new markets with a bare minimum of cross border interference in an increasingly globalised world.
The threat of Brexit
Unfortunately all of this is under threat with the impending referendum on June 23rd which will pose a simple question to the British public – Should the United Kingdom remain a member of the European Union? This campaign will no doubt be fought along social as well as economic lines in the hearts and minds of many voters and I certainly hope that the voice of commerce will cut through the noise and common sense will prevail.
Irish SME’s are heavily dependent on trade with the UK (17% of all exports in 2014) and Brexit would have just as drastic an impact on service businesses as it would on goods for export. In the event of a “no” vote on June 23rd, Ireland would be left scrambling to agree trade terms with Britain in the face of resistance in Brussels to a post Brexit free trade agreement with Britain. Ireland would be very much caught between a rock and a hard place and among a variety of issues thrown up by Brexit would be the increased contributions to the EU budget necessary from remaining member states to fill the void left by Britain. Given the recent “fiscal space” debacle surrounding the Irish general election we certainly don’t need to be scrambling around to find extra cash in our domestic budget.
I am optimistic that common sense will prevail on June 23rd and the people of Britain will prioritise economic stability over social concerns but even if they vote to maintain the status quo we all need to take a closer look at the issues raised by the “no” campaign to ensure the long term stability of the free trade area of the European Union.
Daniel Curran, Director – DFI Consulting.
DFI Consulting is a niche Commercial & Life Insurance provider. DFI Consulting are also the only provider of Personal Guarantee Insurance in Ireland. For further information please visit: www.personalguarantee.ie or www.dficonsulting.ie