As the world shifts on its new Trump axis, members of the insurance industry in New Zealand are attempting to remain optimistic despite a bad prognosis predicted for the Trans Pacific Partnership (TPP).
Prime Minister John Key was reported yesterday saying he couldn’t see a future for it now under a Donald Trump presidency.
“We’ll work our way through it, it’s bad in the sense that it’s very hard to see TPP progressing now in the lame duck period, you’d have to be a real optimist to believe that,” he told Newstalk ZB
’s Mike Hosking.
One person that agreed with him was managing director of NZ-based insurer CBL, Peter Harris
, who admitted the vote did not turn out how he expected it would.
However, he said it did not spell doom for CBL by any means.
“I did not think the US would elect Trump, but it is done, and he will want to be a good president, so I am over it, and CBL is in a good space to make the best of it,” he explained.
“The TPP is possibly dead, but other opportunities always arise.”
Harris said the vote outcome represented “yet another wake-up call” to politicians around the world that they have to listen to people, and not just through the pollsters.
“People in the Arab Spring uprisings, UK’s Brexit, and now the US were clearly not happy with their lot, and they are sick of successive regimes which the general population think do not listen to them,” he told Insurance Business
“And the politicians particularly have to listen to people who are not doing so well financially.
“Those people (if they vote), have more votes numerically than people doing really well financially.
“Elections are now much closer, voters ‘swing’, and cannot be counted on for life any more.”
Harris remained hopeful for a better outcome for a Trump presidency than the doom and gloom being predicted around the world and reflected in the Trump protests which followed the result.
“If Trump focuses on getting the economy right, more people get jobs, and earn a little more, and learns to be a statesman and not just someone seeking soundbite media time, then maybe he might work out,” he said.
Insurance Council of New Zealand (ICNZ) CEO, Tim Grafton, said several Council members had expressed surprise at the result and while no specific insurance implications had been discussed, he acknowledged there was a ‘great deal of uncertainty’ about what the next presidency would actually focus on and how it would deal with those issues.
“I think there’s virtually no chance of a TPP being ratified by the US and if anything [there’ll be] a more protectionist view and that will cause tensions I suspect between the US and China,” he said.
“Whether or not that leads to wider implications for other countries and trade, there’s a question mark there, but obviously anything in that area can have implications for global economic growth and if that were to be adverse then that’s got to impact any sector, not just insurance.”
Grafton said the topic that didn’t get a lot of play during the presidential campaign was around the US view on the Paris agreement regarding climate change.
“There’s a sense that that’s something a Trump administration may not be supportive of and I think that would be unfortunate given the size of the US economy if that were to occur.
“Getting the predicted temperature increase down to 1.5 degrees is something that is beneficial for climate change effect and insurers are certainly in the business of underwriting the risks to property and wider areas like life and health as well.
“So that would be an area where we have to see what happens but it would be a concern in the longer term.”
The CEO of the Insurance Brokers Association of New Zealand (IBANZ
), Gary Young
, said he did expect there would be an impact.
“It is a bit early to understand what the repercussions might be,” he said.
“[But] given that insurance is very much a global market then it must be assumed there will be some impact on the local market, but what that will be remains to be seen.”
Brexit: NZ industry players respond
Prominent insurance figure speaks out against Trump
Image: Gage Skidmore