U.S. insurance and reinsurance companies are rethinking strategic merger or acquisition transactions over a fear of being painted “anti-American” by President-elect Donald Trump, according to a Reuters report.
Recent developments in U.S. business show how market developments and volatility – a risk ranked second place in global top threats to the insurance sector according to Allianz Global Corporate & Specialty (AGCS) – is impacting business, as firms rethink their modus operandi to suit the Trump era.
Demonstrating just how this fear has grown in the insurance and reinsurance industry, Reuters reported that a Bermuda-based White Mountains Insurance Group Ltd deal collapsed after the election because of fears that leaving the U.S. could be seen as “anti-American”.
The potential buyers reportedly also walked away from the deal because of the Trump administration’s likely lowering of U.S. corporate taxes.
Reuters, who did not name its sources, said; “At least two other insurance deals have also fallen apart since the election for similar reasons.”
Wall Street bankers said Trump’s nationalist rhetoric, anti-globalization stance and strategy of using Twitter as a weapon has caused companies to put M&A transactions on hold and rethink moves to cut jobs or move production or tax domicile abroad, according to Reuters.
Allianz Global Corporate & Specialty (AGCS) stated in their 2017 Risk Barometer report; “companies will need to invest more resources into better monitoring politics and policy-making around the world in 2017” and “anticipate any sudden changes of rules that could impact markets.”
As U.S. firms respond to the new business risk of being labelled ‘anti-American’ they fall amongst the vanguard of those investing to protect themselves from what global risk experts say is the second most important business peril of 2017.
