A British departure from the European Union generally won’t harm the country’s “resilient” property/casualty insurance sector, though there are some risks in play for Lloyd’s members, Fitch Ratings said in a new report.

Fitch’s June 24 report predicts that the aftermath of the June 23 Brexit vote will be “credit negative for most sectors in the U.K., due to weaker medium-term growth and investment prospects and uncertainty about future trade arrangements.” At the same time, domestic property/casualty insurers are resilient enough to withstand those conditions, Fitch said.

“Domestic non-life insurers tend to be less sensitive to asset-value deterioration and would probably be resilient to sustained economic weakness,” the Fitch report noted. “A weaker exchange rate would have adverse consequences for non-life insurers’ profitability, but the impact should be manageable and temporary as most non-life business is short-term and can be re-priced regularly.”

For Lloyd’s of London insurers and holding companies, however, there may be some greater risks, Fitch said.

“The international nature of much of the business placed through Lloyd’s of London insurers could increase downgrade risk if economic uncertainty leads to a material portion of international policyholders placing their business overseas,” the Fitch report said.

Fitch added that if a departure from the European Union led to less cooperation between U.K. and EU regulators, some insurance holding companies risk a downgrade.

“This is because our notching criteria afford benefits to holding company ratings under a cooperative ‘group solvency’ style of regulation,” Fitch explained.

Meanwhile, A.M. Best released a statement noting that it doesn’t expect any near-term ratings actions as a direct result of the U.K. Brexit vote.

The implications for the financial strength of insurers with regard to subsequent investment market volatility, currency fluctuations and increased economic uncertainty will be closely monitored,” A.M. Best said.

The ratings agency added: “As the terms of the exit are negotiated, A.M. Best will discuss with rated companies what prospective changes will mean for their competitive positions and ability to continue to access business in the U.K. and the EU.”

Source: Fitch Ratings, A.M. Best