The world’s largest insurance market threw up a host of challenges in 2024, from climactic cat events to elections and reputational risk.
First, the election. Macroeconomic and political challenges were consistently voted near the top of insurer concerns at InsuranceERM conference panels in the US and Europe, and all the world was watching the November US elections. Donald Trump’s presidential win has introduced a range of unknowns for industry to consider, such as the prospect of trade tariffs, growing protectionism, attacks on environmental and DEI initiatives, and an erosion of federal regulatory powers. But if the markets are any guide, Trump’s election signals confidence, with US equities surging to new all-time highs. This could just be the presidential bounce, and one can likely say the volatility charts will be more active when he takes office in January 2025.
Another major ongoing problem for US insurers has been the property insurability crisis. When hurricanes Helene and Milton struck the fears were of multibillion losses which could send insurers scurrying for the hills. Those fears did not materialise, largely due to the hurricanes steering away from potentially more damaging urban pathways. But the lack of availability and affordability of homeowners insurance in high-risk regions continues to bedevil the country. States have been attempting to implement new rules in order to boost their particular markets. In California, insurance commissioner Ricardo Lara’s reforms, drawn together in the face of virulent lobbying, promise to instigate wholesale reform to the state’s antiquated insurance laws. Whether this eases the insurability crisis remains to be seen.
Late in the year, more headlines were made with the killing of UnitedHealth CEO Brian Thompson. It unleashed a wave of anti-insurer sentiment in the US and laid bare the stark unhappiness with which many in America view the sector. Mostly, this was directed at the healthcare business, but undoubtedly it will have put the fear in other insurance segments, whose reputation has been sullied by association. When Joe Rogan, no less, calls “the business of insurance…fucking gross” – as he did in a recent episode of his hugely popular podcast – people stand up and listen. One hopes the industry will do too.
- This is part of a series of articles on developments in 2024 that will appear on InsuranceERM in the coming weeks.