Insurance companies will be doing a significant pivot after the election, according to Novarica, an insurance consultant.
Companies built their strategies around a Democratic president and maybe a Democratic Senate. Now, a whole lot of things need to be rethought, said Novarica CEO Matthew Josefowicz in an email. Such as:
- Insurers can stop worrying about the Department of Labor. A Republican administration is likely to reverse the pending DOL regulations requiring investment product salespeople to act as customer fiduciaries. While this may still happen long-term, it's unlikely to be implemented in the next two years.
- Insurers should start worrying about healthcare again. However flawed the ACA may have been in the industry's eyes, at least it was a known quantity. With the incoming administration's plans to "repeal and replace" facing no opposition, everything may be up for grabs again.
- Insurers need to start worrying more about the blue states. With Federal regulations likely to be eased over the next few years, powerful regulators in Democratic-leaning states are likely to get more aggressive. New York's proposed cyber-security regulations may be just the beginning.
- Insurers need to keep worrying about interest rates. While the incoming administration has said they favor higher interest rates, market uncertainty, a global low interest environment, a rhetorical focus on jobs creation, and a Fed chair whose term lasts until 2018 may indicate that the current ultra-low interest rates will continue for the next few years at least. Insurers will remain in the double-bind of being resource strapped while badly needing to invest in new capabilities.