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Trade Disputes, Brexit and Insurtechs

Recent changes in the political environment cause difficulty for insurtech startups.
  • David Pilla
  • October 2018
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Trade disputes between the United States and several countries haven't targeted insurance and reinsurance interests directly, but those, as well as Brexit, could impact insurtechs.

Richard L. Sega, global chief investment strategist at global asset management firm Conning, said as bad as the trade war rhetoric sounds, the aggregate effect of tariffs and nontariff barriers may not be that big as opposed to the benefits of tax and regulatory reform.

“We do feel like these things will get resolved and when they do, there will be a huge relief rally and a little upward pressure off the dollar,” which he said will benefit emerging markets. That effect then will allow insurers to take some credit risk and diversify away from standard credit exposure while looking for income in other places.

“The resolution of these disputes will have an enormous effect on emerging market valuations and prospects,” Sega said.

Alex Maffeo, founder and chief executive officer of Boost Insurance, said “recent changes in the political environment” cause difficulty for insurtech startups looking to expand internationally.

Boost, a year-old insurtech company and managing general agency, does U.S. business but has international ambitions, Maffeo said.

In a business focused on digitalization, any trade obstacle such as protectionism is a negative influence on business, Maffeo said. He noted insurtech startups based in the United Kingdom may find international expansion more difficult due to the United Kingdom's pending exit from the European Union.

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