The US election has turned into a close race that has left Republicans and Democrats waiting on a knife’s edge.
As of 7:30am ET / 5:30am MT, the presidential, Senate, and House races stand as follows, according to The Associated Press:
The insurance industry, like the rest of the world and many other industries in the US and outside of the country, is closely watching the results. After all, who will lead during the next presidential term will have an impact on health insurance, for one, as well as political risks.
The former has already come to light during the past four years as President Donald Trump made it clear that he intends to move away from the Affordable Care Act, seen most recently with his administration’s approval of Georgia's plan to overhaul how state residents buy health insurance under the Affordable Care Act.
The Centers for Medicare & Medicaid Services announced that federal officials on November 01 had signed off on Gov. Brian Kemp's proposal to offer federally subsidized health insurance through private brokers instead of the HealthCare.gov website. This move away from Healthcare.gov wouldn’t occur till 2023, but a year before that, the state would implement another component of its ACA plan that would pay a portion of insurance companies' costs to treat their sickest patients, a relatively small group that incurs the biggest bills, as reported by The Associated Press.
Additionally, the US Supreme Court is set to hear its blockbuster clash over the constitutionality of the Affordable Care Act on November 10, a week after an election during which Democrats have made healthcare a key focus. Trump has said he will protect people with pre-existing conditions, but hasn't yet cemented a replacement. On the other side of the arena, Democrats have argued that overturning the law would be particularly devastating during the COVID-19 pandemic, considering that millions of people are out of work and at risk of losing their employer health insurance.
On the political risk front, there have been a host of US-linked issues in recent years affecting wider markets including: US sanctions on Russia, the Crimean conflict in Ukraine, as well as the China-US trade war. In 2018, a whopping 89% of companies surveyed by Willis Towers Watson and Oxford Analytica believed that levels of political risk had increased over the past five years. Additionally, 63% of the companies – most representing the Forbes Global 500 – reported that they had recently experienced a financial loss caused by political risk.
Then, in March 2020, a report by Marsh underscored that rising trade tensions, involving many other countries and not just the US, are expected to continue throughout the year, resulting in global political and economic uncertainty for multinational businesses.
In this uncertain environment, the political risk insurance market has been booming, with risk managers increasingly turning to credit and political risk insurance (CPRI) to manage hard-to-predict geopolitical threats to business. Whoever wins the 2020 election, political risks are likely to evolve, depending on the policies implemented by the next president.
Similarly, the broader impacts of the vote for the insurance industry will become clearer in the coming weeks and months.
