Can We Come to Grips With the Zeitgeist?

It’s been an interesting few days/weeks in U.S. politics, especially when viewed from London. In the words of James Bond, some of us have been “shaken, not stirred.” Bond was, of course, referring to his dry martini. Perhaps it has been the occasional martini that has carried us through rough times in London. Recently, the U.K. has had to come to terms with the vote to leave the European Union, and as Europe looks forward to 2017 there could be equivalent turmoil in both French and German politics as the global mood seems to lurch toward nationalism rather than globalization. Plenty of press fodder with lots of ammunition for column inches. But what does this have to do with insurance? The insurance market does not operate in isolation, and it’s essential that insurers understand their role in a volatile and perhaps uncertain world. See also: Thoughts on Insurance After Brexit   While government and policy makers are central to determining the world’s future, it has also become clear that public opinion still has a major part to play in determining their response to risk. The Chartered Insurance report series “Future Risk: Insuring for a Stronger World” carried out 2,678 interviews in five countries (Australia, the U.S., India, Great Britain and Brazil — roughly 500 citizens in each) to rank their perceptions of risk. At a global level, income inequality, overpopulation and global warming were viewed as high-risk, high-impact. Cyber attack, obesity and pandemics were viewed as low-risk, low-probability. If you split these out by country, income inequality remains consistently important as being high-risk, high-impact. Perhaps the recent U.S. elections have simply reflected the zeitgeist of our decade. (“Zeitgeist” is from the German word “zeit,” meaning “ghost,” and “geist” meaning “time.” In other words, the “spirit of the age.” ) So what does this mean for us as insurance professionals? At the very least, we need to understand what’s going on and think of all these political changes in the context of our industry. If income equality is one of the key issues, won’t it also be one of the key drivers of industry change? While the insurance industry cannot solve inequality, can’t it accelerate the creation and distribution of microinsurance products? What will be the impact on the connected financial marketplace? Despite the promise to look inward, isn’t the U.S. too big not to have an impact on global affairs, and won’t that also extend to the insurance industry? See also: What Trump Means for Business   If the new policy is to invest in the U.S., won’t this lead to some element of inflation and corresponding interest-rate rise that will affect non-U.S. markets? Financials have surged back to a level that existed before the collapse of Lehman, and the markets (including the insurance market) are hoping for lighter regulation. Perhaps all this is a perfect counterpoint to the onerous Solvency II requirements in Europe? What then will be the impact on wealth management and life and pension products?