Warning on geopolitics, climate, technology – CEO of Intact Financial

Geopolitics, climate and technology are the three largest themes insurers and risk managers alike should be monitoring carefully, Charles Brindamour, CEO of Intact Financial Corporation, the largest provider of property/casualty insurance in Canada, told delegates at the Airmic annual conference yesterday in a keynote address.

He explained that insurers should monitor all three but also distinguish between changes that are permanent and those that temporary. “You want to manoeuvre to tackle the temporary changes, but want the majority of your energy to be spent on what is permanent,” he said.

He spoke about politics, focusing on the US and the Trump presidency. He identified three main challenges emerging from this: tariffs, questions marks over the role of the US dollar in global financial architecture and countries’ ability to rely on and trust each other.

He described tariffs as the most impactful issue from an economic perspective, stressing they mean lower growth and higher inflation. “All this means our customers will put greater emphasis on value for money,” he said. “For business customers – your input cost is going up – supply chains are disrupted. We think tariffs are here to stay – but they may be lower than people expect.”

In some ways, their impact on insurers is limited, he said. But he also believes the US will become more expensive to invest in. 

For an insurer, what does that mean? Not sure in crisis territory – risks are up but the impact is not that huge on insurers. This environment should not have too big an impact on strategy. “The cost of capital could go up and that impacts your competitive position compared with domestic players.”

He also said he has seen damage done to the democratic regime in the US. “It has been surreal to see partnerships and abandoned and friends become foes – we need to be prepared for the worst. Tail risk is meaningfully up as a result.”

In terms of technology, he described how it is now so embedded in all parts of people’s lives – but also in things such as transportation. “This is very meaningful and had a number of effects – first one is consumers’ expectations have changed – they expect excellence and seamless digital interactions, and this is exacerbated by this quest for value for money,” he said

Commenting on climate, he reminded the audience that 2024 was the warmest year on record. And because of some of the geopolitical forces, the transition to renewable energy sources has slowed down. He also noted that insured losses globally now top $100 billion every year – a trend also predicted to continue. “Therefore, building resilience and being ready for more adverse weather very important,” he said. But he also said he was optimistic that the transition would again accelerate.

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