The new Trump presidency could reshape the insurance and reinsurance sectors through influencing US trade policy, tax reforms, climate regulations and economic growth, according to an analysis from Reinsurance News.

As the 47th US president prepares to take office, the publication revisited his policies as the 45th president, which included a divergent view on defence, trade and climate treaties and the 2017 reduction in corporate tax rates from 35 per cent to 21 per cent.

With benefits accruing to some insurers, his policies raised concerns “about increased competition for offshore reinsurance centres, and could make it harder for international players to compete”.

The article said: “Now, analysts suggest Trump’s administration could consider further [corporate tax] reductions, potentially to 15 per cent. A renewed push for lower corporate taxes could mean further competition for offshore reinsurance centres.

“For some US firms, this could result in a new competitive edge, as lower tax rates may entice more firms to shift operations domestically, potentially squeezing offshore hubs.”

The article said the new administration’s economic policies “including deregulation and fiscal stimulus, may drive inflation and destabilise interest rates, creating significant risks for insurers. Higher inflation may lead to increased claims costs, especially in sensitive lines like property and casualty, further compressing margins for [insurers and reinsurers] already grappling with economic instability.

“Higher rates could enhance investment returns for insurers with significant bond portfolios, while also influencing premium pricing and overall market dynamics.

“However, rapid inflationary pressure might also lead to increased claims costs, particularly in lines sensitive to economic shifts, such as property and casualty.

“The upcoming term could see heightened social inflation — an ongoing issue in the US, where rising litigation costs have impacted claims”.