"We've survived worse things in the past, and we'll survive thistoo."

That's the way William R. Berkley, founder and executivechairman of Greenwich, Conn.-based insurer W.R. Berkley Corp.,opened his keynote speech Thursday at the 118th annual meeting ofthe AmericanInstitute of Marine Underwriters. "But it's still an excitingtime to be in the insurance business."

Reviewing the global economy, Berkley noted that the U.S.election and Brexit are just the beginning of a global trend withthe rest of Europe not too far behind. "The population is unhappywith the status quo and the social system," he added, also pointingout Nigeria's proposal to make owning U.S. dollars illegal, andIndia's action in withdrawing large currency notes fromcirculation.

"China is in turmoil because it's not growing fast enough tosupport its population," Berkley said, "especially the increasingnumbers of retired military and their pensions. The continuingproblem in the Middle East is likely to increase pressure to buildthe Dakota Access Pipeline as a way to reduce dependency on foreignoil, and all of Africa is in turmoil."

All these factors are likely to increase risk for marineinsurance, which is currently dealing with the challenges of largercontainer ships with more cargo, larger cruise ships with many morepassengers and crew, as well as a slower economy that means fewergoods being transported around the world.

Berkley was asked for his opinion of the effect of Brexit on London financialmarkets and the insurance industry. "If you're in London, where canyou move to?" he said. "And people really don't want to relocate,as we found out when we considered moving employees from Delawareto Des Moines."

London was a strong center for financial services for hundredsof years before there was a Common Market and a European Union, andit's likely to remain so, Berkley said.

Election concerns

Addressing the topic of the 2016 presidential election, Berkleysaid that Trump wants to be known as a great president, even if heisn't really sure what that means yet. His life is now dramaticallydifferent, but he hasn't yet fully grasped the limitations theoffice of the president of the United States will impose. Everyminute of his life is now scheduled, and that will be a challengefor him, he added.

For the next 12 to 18 months, Berkley predicted, the economywill get better. Trump will make deals with Congress to pass abudget and begin infrastructure repairs. He pointed out that inbusiness Trump has always had smart advisers, and he's likely to doso in the White House. "Will he listen to them? Who knows?" hesaid.

Related: What does a Trump presidency mean for the P&Cindustry?

On the subject of immigration, there are likely to be somechanges, but not as dramatic as Trump has talked about, Berkleysaid. Most people agree that there is a problem with some illegalimmigrants who are also criminals or who have committed seriouscrimes in the United States, and those are the immigrants thatBerkley believes Trump will target, not every immigrant. "He's apragmatic man," Berkley pointed out. "Don't confuse his rhetoricwith reality."

Effect of outside capital

Outside capital is coming into insurance in the form ofinvestments from pension funds and hedge funds, Berkley said,earning investment income and underwriting profit. But they'reoperating under the fallacy that underwriting profit is automaticwhen it's not. Success in the insurance industry comes back tounderwriting skill and expertise, he added. Capital and expertiseare both needed, but in different ways.

If interest rates go up, alternative capital won't leave theinsurance industry, Berkley predicted. But a catastrophic loss —something like a new asbestos problem or multiple hurricanes — willmake them leave. "If you don't have a long enough view, you'll bedriven out," he said.

Insurance is a long-term business in a short-term world thatmoves at the pace of text messages, Berkley observed, but resultsdon't happen that quickly, which makes pricing effectively achallenge. "The most exciting parts of this business require themost expertise," he said, referring to the opportunity to insurerisks that are one-off or unusual.

Berkley believes that artificial intelligence and emerginginsurance technology will provide better data to make betterunderwriting judgments. As an example, he described investigatorsusing artificial intelligence to detect art forgeries with 99percent accuracy. "AI is exciting but frightening because we're allgoing to have to change the way we do things and change is hard,"he concluded.