Image by: Gage Skidmore, flickr
On the eve of his inauguration as the 45th
President of the United States, what could Donald Trump’s reign mean for the insurance industry?
For Americans, the repeal of the Affordable Care Act, or Obamacare as it is known, is already underway. This looks set to be the most significant immediate impact President Trump will have on the industry.
Internationally, however, Trump’s election could impact the political risk market.
Political risk has more traditionally been linked to developing countries, but the Western world has seen its fair share of instability over the past 12 months.
2016 was a year of political change underlined by the election of President Trump and the UK’s decision to leave the European Union.
Karina Rodriguez-Diaz, placement manager, crisis management at Aon, said that while these two events “did not bring about any particular or dramatic change in risk appetite from a political risk insurance market perspective,” the situation will be monitored.
“It will be interesting to see the longer term political and economic impact both these events might create, not only in the US and Europe, but the rest of the world,” Rodriguez-Diaz told Insurance Business.
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“As a result of globalisation, these events will most likely bring uncertainty and instability not only to OECD countries but to the developed world.”
Increased globalisation over the last decade has seen political and economic risks intertwine and evolve in terms of complexity. Now more than ever, a decision in a major global economy could have ripple effects on countries around the world.
While political risk insurance markets are currently stable around the world, Rodriguez-Diaz said that uncertainty will play a role in the development of the market in 2017.
“The political risk landscape is very up in the air at the moment,” Rodriguez-Diaz continued.
“The uncertainty comes from varying factors impacting OECD countries that can have a big wave impact across the world.
“The unknown is where the risk really is and we will only be able to see the actual effects later on.”
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