The 2024 U.S. presidential election, one of the most closely watched and contentious in recent history, has culminated in Donald Trump’s re-election as the 47th president. With the nation sharply divided over key issues—from economic policies and immigration to the future of democracy—this election has underscored the deepening polarisation in the U.S. political landscape. As ballots are counted and legal challenges loom, the country stands at a critical juncture, with Trump poised to once again shape the future of America amidst intense scrutiny and ongoing controversies. But what does this historic moment mean for the global InsurTech industry?
The 2024 election was nothing short of extraordinary. It saw a last-minute candidate switch, two high-stakes debates, two assassination attempts, and even an intervention by the world’s wealthiest individual.
All of this culminated in a convicted felon returning to the Oval Office, and Trump’s re-election marks an even greater disruption than his 2016 victory, signalling a profound shift in American politics.
The rise of ‘Trumpism’ is no longer considered a diversion from the norm, but is now firmly entrenched as the dominant political force for the majority of US citizens.
The Republican candidate triumphed over Democrat Kamala Harris in an election that polls had predicted would be closely contested. He landed decisive blows by winning in several crucial battleground states, and looks set to close out a House majority that would give him control over all branches of government
In light of these seismic political changes, FinTech Global’s Harry Slade spoke with leading industry figures to explore the far-reaching implications for the InsurTech sector.
“As the saying goes, when America sneezes, the world catches a cold,” said Janthana Kaenprakhamroy, CEO and Founder of Tapoly. “The U.S. presidential election impacts not only the American people but also economies and industries worldwide, including insurance and InsurTech.”
The president-elect has long championed the use of tariffs as a key tool in his economic policy, and his stance on trade remains a central part of his platform heading into the 2024 election.
Throughout his first term, Trump implemented a series of tariffs on a wide variety of imports, including steel, aluminium, and other goods, in an effort to protect American industries and push for better trade deals.
Within his campaign, he has vowed to escalate this approach even further, proposing sweeping tariffs of up to 20% on all foreign imports, with even harsher penalties—such as 60% tariffs on Chinese goods and a striking 200% tariff on cars from Mexico, according to BBC News.
In the eyes of Kaenprakhamroy, this is something insurers should be concerned about. She explained, “Under Trump, we might see increased protectionism, with higher tariffs affecting international trade and potentially influencing the cost and accessibility of global insurance coverage.”
Trump’s erratic nature is also a concern for the sector’s incumbents. In 2019, he openly floated the idea of withdrawing the U.S. from NATO, a move that could have far-reaching geopolitical consequences. His friendly rapport with Russian President Vladimir Putin, coupled with comments suggesting he wouldn’t discourage attacks on NATO allies that fail to meet their financial obligations, has added to these fears.
For the insurance industry, these developments could create significant instability, particularly in the political risk insurance market, which will likely be a key consideration for industry players moving forward.
Kaenprakhamroy commented, “Trump’s tendency to question international alliances like NATO could create uncertainties that impact political risk insurance and drive demand for coverage in regions feeling the ripple effects of policy shifts.”
Economic success?
However, not all are so concerned by Trump’s impending return to the White House.
Forbes McKenzie, CEO of McKenzie Intelligence Services believes that the move will see US firms overjoyed due to Trump’s economic policies which saw much acclaim throughout his previous term
According to economists at Oxford Economics, if Congress ratifies his fiscal agenda, GDP growth could pick up in 2026 and 2027, before decelerating significantly toward the end of his second term.
“The US tech industry will be welcoming a Trump victory with open arms given his promise of less regulation and lower taxes for big corporations, as well as his economic nationalist stance,” according to McKenzie.
This viewpoint was shared by Simon Laird, Global Head of Insurance at RPC, who echoed the sentiment that US insurance firms would be gleeful at the news.
Laird remarked, “Traditionally, Republican administrations are seen as more business-friendly, and more likely to reduce regulatory hurdles and cut corporate tax rates. That perspective would lead to markets favouring a Trump win and his commitment to corporate success and the economy. This would likely be good news for insurance carriers in terms of their own cost of business.”
But the potential advantages for the sector extend beyond US shores. The UK could also be a serious benefactor due to the symbiotic relationship between the global superpowers.
McKenzie suggested, “For the UK overall, it will be business as usual. Naturally, our tech leaders will be expecting some bumps in the road, such as tariff increases and the currency implications of sterling slumping in the face of a strong dollar.
“Remember, however, that the UK’s tech sector has a significant and mutually beneficial trade relationships with the USA, who are our single biggest trading partner. Our cross-Atlantic, special relationship is a symbiotic one, and damaging it would be harmful and costly to both parties.
“We are quick to forget that the UK is home to one of the three most successful tech economies in the world, and is the number one destination for venture capitalist investment in Europe. It is no wonder then that so many US tech companies have a presence on our shores, and that companies like Google are actively increasing their headcount here.
McKenzie did however caution the UK government regarding their approach to Trump, admitting that Sir Keir Starmer’s Party may have to soften their formerly stern stance on the president.
“What is clear is that the government must move swiftly away from its members’ previous condemnations of Trump and instead put their efforts into forging a stronger, more practical, commercial relationship with the new administration, so that UK tech firms can compete on the same terms as their US cousins,” he stated.
This move has already begun, with Foreign Secretary David Lammy distancing himself from a tweet aimed at Trump in 2018, where he described him as a “tyrant”. Instead, the Member of Parliament for Tottenham has claimed he is sure he can find “common-ground” with the president.
Instant impact
Trump’s impact on the insurance industry has already begun to be felt, as millions of Americans face the possibility of losing vital subsidies that help cover the cost of health insurance, according to NBC News.
These subsidies, which were introduced as part of the American Rescue Plan in 2021, are set to expire at the end of 2025. The plan, aimed at expanding the accessibility of health insurance through the Affordable Care Act, significantly increased the financial assistance available to those purchasing coverage.
It also extended eligibility to a broader group, including many in the middle class.
With these subsidies nearing their expiration, it will be up to the new Congress and president to decide whether to extend them. However, both Trump and the Republicans have already indicated their opposition to such a move, with him mentioning repealing it as far back as 2015, according to Fortune.
Looking ahead
Insurance companies will need to brace for significant uncertainty as they look ahead to the potential changes under Trump’s leadership.
Insurers will also need to navigate the shifting political landscape, adjusting to the policies of an administration that has signalled a preference for reducing government involvement in healthcare, and has been less keen to support ESG initiatives than the Democrats.
Carriers will need to stay vigilant and continuously assess changes in the regulatory landscape to thrive in 2025 and beyond.
As the political climate shifts, insurers must adapt to any alterations in healthcare policy, particularly regarding subsidy structures, coverage requirements, and market regulations.
Laird added, “Carriers will need to closely monitor regulatory, legislative, and judicial developments to best position themselves in 2025 and beyond.”
Keep up with all the latest FinTech news here
Copyright © 2024 FinTech Global
