Paul Merrey looks at the potential impact of a Trump presidency on the London Insurance Market.
Paul Merrey, Insurance Partner, KPMG UK, comments on the result of the US Presidential elections and the potential impact for the London Insurance Market:
“Today the world has seen yet another shock result as Donald Trump wins the election to become US President. Markets again face volatility as uncertainty mounts and the US Dollar and stock markets fall causing an immediate hit to London Market insurers’ USD earnings and investment returns.
“We now wait to see whether we are set for ‘Hard Trump’ or ‘Soft Trump’. However, we are likely to see increased protectionism in the form of higher or wider US tariffs which will depress global trade, reducing demand for Marine, Aviation and Transport insurance and Marine Protection & Indemnity cover. Expected falls in global economic activity will depress growth across many product classes. Whilst it has not been advocated to date, a natural extension of Trump’s campaign could be to introduce restrictions on international insurance and reinsurance, akin to those operating in emerging markets such as Brazil, India and Indonesia.
“There will be some opportunities as we could see increased demand for political and trade credit insurance. The falling price of US assets and global currency volatility will also create opportunities for insurance M&A and the market shake-up affecting the US healthcare sector could create openings for new entrants into the health insurance market.”
For further information please contact:
Christina Bridge, KPMG Corporate Communications
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 12,000 partners and staff. The UK firm recorded a revenue of £1.96 billion in the year ended September 2015. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 174,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.