Updated 2 p.m. ET, Nov. 10, 2016

Many Americans, especially those on the East Coast, stayed upuntil the early morning hours on Nov. 9 to learn the final outcomeof the 2016 elections.

Although some state races are still undecided, Donald J. Trumpwas elected the 45th president of the United States on Nov. 8 in astunning upset over Hillary Rodham Clinton.

When the news of Trump's victory broke financial markets aroundthe world took a nosedive, with trading in S&P Futures haltedin the early hours of Nov. 9. Gold prices, long seen as a safehaven for investors, rose. The financial markets rebounded, withthe Dow briefly reaching an historic high of 18,647 at 3:20 p.m.ET, closing at 18,589 — providing a glimmer of hope forinsurers who have for too long been beset by pitiful investmentreturns.

Yet the biggest question still on everyone's mind is: "Nowwhat?"

PropertyCasualty360.com has compiled the views of severalProperty & Casualty insurance industry experts on what a Trumppresidency — along with a Republican-controlled Congress — couldmean for purveyors of P&C insurance, at least in the shortterm.

"With this election finally over, it is time to put theinterests of the entire country first," the Alexandria,Virginia-based National Association of Professional InsuranceAgents said in a statement, acknowledging thedivisiveness of the 2016 campaign.

"While both political parties campaigned on differing roles ofthe private market and regulation, the National Association ofProfessional Insurance Agents will continue its efforts to promotethe valued role of the professional independent insurance agent byseeking business-friendly policies that will encourage a strongmarket," the group added. "In addition to capturing the WhiteHouse, Republicans will continue to control both houses ofCongress. Keeping in mind that neither party holds a 60-vote'super-majority' PIA encourages the next Congress to avertstalemates by finding bipartisan solutions to strengthen oureconomy."

Leigh Ann Pusey, president and CEO of theWashington-based American Insurance Association, saidin a statement, "With the election of Mr. Trump as president,Republicans now control both chambers of Congress and the WhiteHouse. The combination gives us hope that the legislative log jamcan be broken.

"The property-casualty industry looks forward to working withthe upcoming 115th Congress on significant issues of legislativeand regulatory importance," Pusey continued. These includereforming and obtaining a long-term reauthorization of the NationalFlood Insurance Program; passing comprehensive tax reform thatrespects the fundamental structural and regulatory differencesbetween insurers and other financial services industries; andfinding a solution for insurers that addresses the need for auniform approach to cybersecurity, she said.

"We also anticipate a more balanced approach to regulations thatwill allow the industry to grow and develop new markets thatrespond to technological advances, such as telematics, big data andautonomous vehicles," Pusey added. "Additionally, we congratulateSen. Mike Crapo (R-Idaho) on his reelection to the Senate, andincoming chairmanship of the Senate Banking Committee. It is ourhope that new members of Congress and the Trump administration willwork to find common ground in the 115th Congress on these importantissues."

Brady Kelley, executive director of NAPSLO, said that the organization'sfocus will continue to be on educating members of Congress —especially new ones — about the surplus lines market, how itoperates, how it performs, and how it is regulated. "Our efforts inthis regard will simply increase with a number of new members towork with in the next session of Congress," Kelley told PC360. "Ourother priorities in D.C.: one, preserving the uniformity andefficiency provided by the NRRA; two, private-market solutions andconsumer choices for complex flood risks; and three, promotingnational uniformity in producer licensing. All represent issuesthat have already received strong bi-partisan support."

Less federal oversight predicted

Mark Walls, vice president of communications and strategicanalysis for St. Louis-based insurer Safety National, says the Republicanpresidential victory reduces the possibility of federal oversightin workers' compensation, something that had seemed more likelyunder another Democratic administration. 

"We can take a deep breath when it comes to the threat offederal intervention in workers' compensation," Walls tellsPropertyCasualty360.com. "A new administration means a new agendafor the Department of Labor. We will see what that agenda is but Ido not expect it to include increased federal governmentinvolvement in state issues."

Matthew Josefowicz, president and CEO of Boston-based insurancetechnology consulting and research company Novarica, predicts that federaloversight of financial services is likely to be reduced with anincoming Republican administration backed by a RepublicanCongress.

"While some insurers may find that encouraging," he said, "thisalso has the potential to embolden attorneys general and insurancecommissioners in major Democratic-leaning states like Californiaand New York. Insurers may find themselves dealing with aggressivestate regulators with strong positions on things like privacy,cybersecurity, acceptable uses of third-party data in rating, andother things. This could reduce agility in key markets and increaseoperating complexity generally for P&C insurers. New York'sproposed cybersecurity regulations may be just the beginning."

In discussing the investment climate, Josefowicz added that"Insurers need to keep worrying about interest rates. While theincoming administration has said they favor higher interest rates,market uncertainty, a global low interest environment, a rhetoricalfocus on jobs creation, and a Fed chair whose term lasts until 2018may indicate that the current ultra-low interest rates willcontinue for the next few years, at least. Insurers will remain inthe double-bind of being resource strapped while badly needing toinvest in new capabilities."

He added that reduced regulation of the financial servicesindustry could also accelerate the movement of alternative capitalinto the reinsurance and specialty risk market.

The Coalition Against Insurance Fraud,based in Washington, D.C., said that the biggest concern is whetherthe Trump administration will continue the federal government'saggressive stand in combatting healthcare fraud. FBI investigationsand Department of Justice prosecutions have helped set records forarrests, convictions and financial recoveries in the last eightyears, according to the Coalition.

As for state elections, the Coalition noted that Wayne Goodwin,the insurance commissioner in North Carolina, lost his election. Hewas a strong supporter of anti-fraud measures, sponsoring aneffective fraud bureau, and he currently chairs the NAIC Anti-FraudTask Force. The change of governors and insurance commissioners inother states, such as Delaware, also may affect law-enforcementefforts to combat fraud.

Global reinsurer Swiss Re noted in a preparedstatement that "There is a high degree of uncertainty as to theextent to which Mr. Trump's stated policy agenda will beimplemented once he is in office." The company expects thatinsurers will be most affected by Trump's proposals related toObamacare and the environment. On Obamacare, no clear alternativehas been laid out yet. On the environment, Trump can put a stop toefforts to curb carbon dioxide emissions and fight climate changeby rejecting the Paris climate treaty, re-starting the review ofthe Keystone oil pipeline, allowing for oil exploration in Alaskaand the Arctic Ocean, and withdrawing existing climate regulationsor stopping their enforcement.

Given the wide range of uncertainties regarding Trump's policyproposals, Swiss Re added, it's difficult to estimate the extent ofthe impact on the economy and its timing. "Our view is that most ofthe impact will be slow moving and will occur in 2018-2019 at theearliest."

According Michael Trilli, a senior insurance analyst atBoston-based research company AiteGroup, a less regulation-focused administration willallow more opportunities for growth in business, providing carriersmore opportunities to underwrite business.

Related: 

Insurance issues on the campaigntrail

Trump most favorable to insurance industry,according to A.M. Best survey

Save

Save

Save

Save

Save