In the world of the very stable genius, the London broker is king

At the World Federation of Insurance Intermediaries (WFII) annual meeting in Amsterdam in 2022, Nic De Maesschalck, our sovereign leader, noted that it was extraordinary that representatives from both the United Kingdom and the United States of America had cited “political instability” as a key concern in their country. It was June. 

At home we were mired in the dying days of the Johnson premiership. In the US, the immediate past-president was doing all he could to stamp his mark on the upcoming mid-term elections by endorsing candidates running for the Republican nomination against incumbent party candidates.  The sense that two of the world’s most stable democracies were in, at best, turmoil was tangible.

Fast forward 14 months and has this problem gone away?

The Rishi Sunak-regime, by restoring the concept of basic competence to the governance of our country, has certainly calmed tensions.  But we are very far from a stable base where industry can plan and lobby to add our expertise to help drive public policy. 

We have spent considerable time over the last few years working with a number of government departments to help develop their net zero strategy. And we have been reasonably successful (I hope) in persuading ministers and civil servants that we are a community with deep knowledge in the area who, with the right incentives, can help deliver very positive outcomes. 

This work is valuable on several levels.  It helps develop compelling solutions for clients – specifically around climate transition and new green technologies.  But it also develops our relationship with government such that, when other subjects arise, they think of us a trusted partners to consult. 

A shifting focus on net zero

But the result of the Uxbridge and Ruislip by-election has, despite protestations to the contrary, seen government appear to retreat from a key focus on net zero. This comes only a couple of weeks after Lord Goldsmith’s resignation letter suggesting that the climate challenge is not at the forefront of the prime minister’s mind. 

Emission zones and low traffic neighbourhoods are in the government’s crosshairs; fossil fuel extraction is back on the agenda. Whilst the science remains the same and so helping clients meet the need to wean themselves off carbon is crucial, it does present a conundrum. Clearly meeting client need must be paramount over flirting with politicians.

But what if the two aren’t mutually exclusive? The issues around regulatory treatment of new technology and potential need for tax incentives to aid green development have not gone away.  But will they be met with as sympathetic an ear as they might a few months back?

Meanwhile, in our largest market, the man facing three criminal trials before the general election next November, is currently, according to the RealClearPolitics average, nearly 36% ahead in the polls for the Republican nomination for President. (Spoiler alert: US polls this far out from election day do tend to be disproportionately influenced by whether people have heard of the candidate, but it is still quite a big number.)

And even conviction in any of the trials is unlikely to preclude him from running for and, potentially, winning the Presidency. The only misdemeanours that would rule that out, I believe, being acts of rebellion as set out in the 14th Amendment and it may be a stretch to include the events of January 6 2021 within that definition.

Which presents another conundrum.  Not wanting to beat the climate drum too much but it is a good yardstick, the difference in environmental stance between a second Biden administration and a second Trump one is likely to be stark. And even if Trump is not successful in winning the nomination, there is a reasonable possibility that whoever does will have had to make significant concessions to the climate hawks to do so. So, again, the long-term interests of clients and the short-term interests of having influence with government might not align.

A chance for the insurance profession to shine?

All of which could come to vex, say, the person running the trade association representing London and international insurance brokers. But I think there is good news. This is a live issue, but managing issues is what this industry is supposed to be good at. 

Indeed, when we returned to the subject at WFII this year, we agreed that a world of heightened risk should be an opportunity for the purveyors of risk management solutions. And we will act on that. 

We will look to engage with the Labour party on this and other topics. And whether January 2025 brings President Biden, President Trump or President Brian Kemp (you heard it here first) we will find a way to ensure our voice still carries weight whilst continuing to do right by our clients. Political instability in UK and US may not be what you would want or expect in 2023.  But break it down to its component parts and it is just another thing we are good at handling.