Marine Insurance in the Trump Presidency: Smooth Sailing in 2017?
Although the Trump Administration's plans for significant infrastructure investment, including key ports and terminals, bode well for the marine industry, it is unclear how proposed restrictive trade policies will impact port import/export tonnages and the need for ships. However, expect some ripple effect of these changes in the marine insurance market.
President-Elect Donald Trump's protectionist policies, which would require the use of U.S. flagged vessels on certain exports and an increase in petroleum exports, could increase the number of U.S. flagged vessels. In other countries that have adopted similar protectionist policies, such as Brazil, restrictions on international insurance and reinsurance have also been introduced. New or re-flagged vessels and insurance restrictions could offer new opportunities to U.S.-based marine insurers. It has also been noted that one of the most important opportunities for the London insurance market arising from "Brexit" is the ability to develop new relationships with U.S. insurance markets. Thus, expect increased activity post-election in the U.S. insurance market, which could see an impact from favorable legislation and interested foreign investment.
On the other hand, President-Elect Trump's international policies may impair the marine insurance market's efforts to restore business links with countries such as Iran and Cuba. Trade restrictions, and a potentially slowed economy, would reduce the goods being transported around the word, and, in turn, decrease the need for marine insurance. Political risk insurance, an important insurance product for the marine and offshore energy industries, may become more necessary to business plans in these changing times. Negotiating language with brokers over these clauses is a newer dynamic in an age of increased populism that has led to unexpected government shifts in ideology and business practices.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.