A United States Perspective
With Joe Biden’s inauguration as the 46th president of the United States and a Democrat-controlled Congress with a razor-thin majority in both the House and the Senate, what can we expect in the new administration’s first 100 days and the next two years? What sectors face the greatest impacts from the change in leadership inside the Beltway from a Biden presidency and a Democrat-controlled Congress? Who are the likely winners and losers? What should companies do now? This Flash Report addresses these questions.
The important dynamic on Capitol Hill is that, as a result of the Georgia Senate run-offs, the Biden administration will be working with Senator Chuck Schumer in deciding what comes to the Senate floor for vote rather than be faced with having to negotiate with Senator Mitch McConnell. The president has expressed a desire for bipartisanship, meaning achieving 60 votes in the Senate to avoid a filibuster or use the budget reconciliation process if 60 votes are not attainable. The nuclear option to do away with the filibuster is off the table, at least at the outset, as Senator Joe Manchin has said he will not support it. However, passing significant legislation will not be easy and the Democrats may have to resort to budget reconciliation to get certain things done. But Democrat control of the Senate does open up opportunities to President Biden to get the nominees he wants to the floor. The margins in both the House and Senate are such that moderates may be key to governing, particularly if Speaker Nancy Pelosi is unable to hold her slim majority together.
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The First 100 Days
In the aftermath of any presidential election with a change in party leadership, the question arises as to the likely focus out of the starting gate. We can expect much is on the agenda. However, there may be headwinds to progress on the Biden agenda, the most notable being how much of Congress’ time will be soaked up with the focus on Trump’s impeachment trial in the Senate. While the House operated with dispatch on a vote to impeach the former president, it is possible that it may wait until after the Biden administration’s first 100 days to send the article of impeachment to the Senate.[1] This approach suggests that some Democrat leaders do not want to hamstring Biden’s first 100 days, as every president gets only one of those.
However, Speaker Pelosi has declined to reveal when the House will send its resolution of impeachment against the former president to the Senate, leaving everyone guessing as to when the trial will take place. The nine impeachment managers appointed to lead the Democrats’ case against Trump are presently working on taking the matter to trial.[2] That process may take time, but it is possible that the impeachment article may be sent immediately to the Senate once the Democrats are ready to make their case. If that happens, the Biden administration will face a historic and potentially time-consuming distraction on advancing its agenda during the first 100 days.
With the above caveat, below are likely priorities of the president’s administration in its first 100 days under eight broad themes. The first 100 days will be kicked off with a “10-day blitz” of executive actions focusing on four overlapping and compounding crises – the COVID-19 crisis, the resulting economic crisis, the climate crisis and a racial equity crisis.[3] Of the priorities summarised below, we do not expect them all to be accomplished in the first 100 days. But we do expect each of the broad themes to be addressed through either taking definitive action or laying the foundation for the next two years through the 2022 midterms. The agenda follows and is supported in greater specificity in Appendix A:
- Contain the COVID-19 pandemic. Address the COVID-19 pandemic by sparing no expense in undertaking a number of initiatives based on science to turn the pandemic around.
- Shore up the Affordable Care Act (ACA). On the broader healthcare front, reverse Trump’s executive orders to dismantle the ACA, build on the ACA by placing emphasis on a government-sponsored plan that competes with private insurers and reinstituting the individual mandate, and take measures to lower prescription drug prices.
- Reverse the prior administration’s other executive orders. Reverse many other Trump executive orders, particularly those weakening environmental standards and opening federal lands to oil and gas extraction. Sign executive orders to take measures that are within the full authority of the office to initiate progress on significantly reducing GHG emissions. Propose legislation to end fossil fuel breaks and begin transitioning away from the oil industry to renewables, electric vehicles and energy efficiency.
- Pass stimulus, tax and infrastructure legislation. Request Congress to pass more stimulus legislation to help suffering Americans by giving them the balance of their coveted $2,000 coronavirus payments. Push for a tax and infrastructure plan, which is part of Biden’s “Build Back Better” programme, later in the spring.[4]
- Undertake focused initiatives to create jobs. Initiate targeted business initiatives to create millions of manufacturing jobs through tax incentives.
- Address systemic racism and growing economic inequality. Deliver on Biden campaign promises around addressing systemic racism and growing economic inequality.
- Reverse the prior administration’s decisions on immigration. Take a number of steps to roll back the Trump era decisions on immigration.
- Empower workers and unions. Focus on strengthening worker organising, collective bargaining and unions.
The above themes do not cover other matters the Biden campaign promised to address related to foreign policy. There are many questions to be answered as the new administration gets underway. But the above agenda illustrates potential focus of the first 100 days and the agenda through the 2022 midterms.
Impact on Select Industry Sectors
There are winners and losers in any change in the White House. Below we comment on the potential implications of a Biden administration on various industry sectors and the 117th Congress. While the House and Senate are both controlled by the Democrats, the majority advantage is razor thin. Not only may this reality of divided government pose limitations on the extent to which progressive legislation can be passed, but it also could pose limitations on the extent to which any legislation can be passed.
Below is a summary of possible winners and possible losers from the Biden presidency and Democrat-controlled Congress:
Consumer Products
Construction
Renewables
Telecommunications
Banking and Capital Markets
Defense
Oil and Gas
Shipping
Technology
Airlines
Automotive
Healthcare
Industrials
Insurance
Pharmaceuticals
Utilities
Appendix B provides analysis and supporting commentary discussing each of the above sectors, largely based on reviewing the Biden campaign’s policy statements.
What Do Companies Do Now?
With a Biden presidency and a Democrat-controlled Congress, companies need to address the impact of changing political realities. Following are suggestions companies can consider now:
Evaluate strategic assumptions. Every organisation’s strategy has underlying assumptions, explicit or implicit, about the future. If they haven’t already, companies should assess their underlying strategic assumptions in light of likely actions over the next two years, including actions that can be undertaken unilaterally without congressional support. If it’s possible that one or more assumptions might be rendered invalid in the foreseeable future, then senior management should assess the ramifications to the strategy and business model and evaluate the organisation’s options. As suggested in the next point below, scenario analysis may be useful in this regard.
Consider the implications of plausible scenarios germane to your sector and begin preparing for the possible. Formulate appropriate scenarios, considering the impact of the new administration’s various policy initiatives with respect to regulatory matters, taxation, immigration, trade, infrastructure investments, and other matters on the company’s markets, channels, customers, employees, supply chains, cost structure, business model and cash flow. Use the scenarios to understand the potential impact on the business and formulate strategic alternatives to capitalise on market opportunities and address emerging risks. Update the analysis as the president’s team is identified and policies are clarified through the first 100 days.
Watch for influence opportunities. A lot of spending will be proposed over the next several months as well as legislation that can affect multiple industries. Companies should stay in touch with developments using their appointed insiders and advocates and, when the industry’s interests are at stake, look for opportunities to educate policy makers and legislators on the implications of specific proposals. When addressing the particulars of specific legislation, it is important to tie arguments for or against to what’s best for the country and for the particular state or district in question.
Consider strengthening the company’s commitment to and reporting of ESG performance. Under a Biden administration, it is a fair bet that increased importance will be placed on sustainability performance and reporting. For example, in the first 100 days, public companies may be required to disclose climate risks and GHG emissions in their operations and supply chains. Viewing this as an opportunity, companies should focus on whether their ESG storyline is resonating in the marketplace and impacting the company’s valuation. They should understand how the company’s message compares to peers, leaders and key competitors. They should assess their processes for engaging and understanding the expectations of ESG stakeholders. For example, institutional investors and asset managers having a stake in the company continue to articulate their expectations for reporting ESG performance as well as the ESG criteria they are using in following the industry. It may also be useful to monitor the company’s ESG ratings and understand what makes them change.
Monitor developments on trade, but don’t expect quick changes. Expect theBiden administration to engage multilaterally with the global economy and with trade issues. With respect to China, expect an effort to formulate a coordinated approach with America’s traditional allies. The Biden campaign committed to reduce dependency on China and other countries for critical goods (e.g., PPE, drugs) in times of crisis by bringing back related supply chains to America. In their business planning, companies should not expect a significant change in the current tariff structure until after the administration completes a thorough review of its trade policy options in consultation with its allies. That review will take time to complete and there are higher priorities on President Biden’s agenda.
Make adjustments for increased costs. The Biden administration will likely reverse Trump’s executive orders on deregulation as well as appoint agency heads who may revise rules within the context of existing laws. The significance of these changes and their impact on costs bear monitoring closely. Changes made to the ACA could impact companies. Given the massive deficits and the damage wrought on the economy by the pandemic, a corporate tax increase is inevitable.
Follow the money. The Biden presidency will push an infrastructure bill that would invest in restoring highways, roads and bridges as well as in renovating schools and replacing water pipes. It will focus on electric vehicles and trains. It will seek to build out rural broadband access. And this would largely be done with American-made materials and American labour, a big opportunity for construction and manufacturing companies. The narrative on America’s infrastructure needs is well known, so expect the buzz on infrastructure investments to get louder. The only questions are where, when and how much.
Update M&A strategy. Expect Congress to increase the capital gains tax. The new administration’s expected focus on new regulation, increased antitrust oversight, trade and de-emphasising fossil fuels may also impact the M&A landscape. So may its approach to managing the COVID-19 pandemic. Companies should take these changing dynamics under consideration and assess their acquisition and divestiture strategy in view of their overall corporate strategy and the economic and regulatory climate.
Play the game of resilience and be good at it. Unfortunately, companies cannot rule out the possibility of another protracted lockdown as governments – national, state and local – deal with the COVID-19 pandemic. Companies with mature digital capabilities were more successful in navigating the pandemic with a business built to be run and reach more customers from anywhere. Companies should be thinking about the parts of their business that are or should be hyperscalable and opportunities for opening digital channels, repositioning within the end consumer’s value chain, evolving product and service delivery in a contactless world, improving customer engagement continuously, increasing workplace flexibility, reskilling and upskilling employees, and de-risking the supply chain.
Look for opportunities to diversify. Diversification strategies can enhance resilience. For example, power companies can integrate additional renewable generation, low-carbon fuels and natural gas as a “bridge” fuel. They can also:
- Invest in and deploy utility-scale battery storage assets to supplement and support the more intermittent solar and wind generation.
- Transition some infrastructure and assets to support low-carbon fuels such as hydrogen and bio-methane.
- Expand capabilities to plan and manage a future grid that is more “plug and play” than the current one through increased presence of distributed energy resources, a source of decentralised, community-generated energy.
- Make investments supporting the electrification path (smart metering, electric vehicle smart charging and smart cities infrastructures), including feasible, attainable steps.
This is just one sector, but it illustrates ways companies can adapt to the new political headwinds for fossil fuels blowing in Washington.
Summary
As priorities and policy direction clarify over time, companies can firm up their responses to the resulting changes in the business environment. With a new administration and the 117th Congress in place, it is never too early to start considering alternatives to current strategies.
Appendix A
Biden’s Agenda for the First 100 Days and Through the 2022 Midterms[5]
Below are likely priorities of President Biden’s administration in its first 100 days under eight broad themes. Of course, we do not expect all of these priorities to be accomplished in the first 100 days. But we do expect each of the broad themes to be addressed either through taking definitive action in the first 100 days or laying the foundation for action during the next two years up to the 2022 midterm elections.
- Contain the COVID-19 pandemic. Address the COVID-19 pandemic by sparing no expense in undertaking a number of initiatives based on science to turn the pandemic around:
- Encourage social distancing and handwashing as the “best defense” until early next year.
- Issue a national mask mandate for federal lands and in federal buildings.
- Sustain the policy for free COVID-19 testing but make it more widespread by increasing federal funding for drive-through testing sites.
- Appoint a “supply commander” to coordinate and direct the distribution of critical equipment and supplies as COVID-19 cases peak at different times in different states and territories.
- Expand U.S. medical equipment manufacturing.
- Shore up the distribution and administration of free vaccinations.
- Rejoin the World Health Organisation.
- Provide funding to protect students, educators and staff by making classroom sizes smaller to enable physically distanced learning, improving school building ventilation, covering costs for PPE and sanitation efforts, providing training for educators, parents and students to help them adapt to new circumstances, and implementing other steps that would encourage communities to open schools by the end of April so working parents can fully return to their jobs.
- Ensure access to the broadband and technology necessary for learning from home when it’s necessary.
- Shore up the Affordable Care Act (ACA). On the broader healthcare front:
- Reverse executive orders to dismantle the ACA and lay the foundation for working with Congress to build on and enhance it.
- In building on the ACA, place emphasis on a government-sponsored plan that competes with private insurers and reinstitutes the individual mandate.
- Lower prescription drug prices by allowing Medicare to negotiate drug prices directly and permitting importation of prescription drugs from abroad.
- Increase subsidies and coverage by: extending tax credits; limiting consumer healthcare spend on insurance to 8.5% of income to enable participation of lower income households; and allowing undocumented immigrants to buy into the public option, but making them ineligible for subsidies.
- Reverse the prior administration’s executive orders. Reverse many other Trump executive orders, particularly those weakening environmental standards and opening federal lands to oil and gas extraction. Sign executive orders to take measures that are within the full authority of the office to initiate progress on significantly reducing GHG emissions:
- Require public companies to disclose climate risks and GHG emissions in their operations and supply chains.
- Require aggressive methane pollution limits for new and existing oil and gas operations.
- Use the federal government procurement system to drive toward 100% clean energy and zero-emissions vehicles.
- Require carbon sequestration technologies on power plants.
- Ensure all U.S. government installations, buildings and facilities are more energy efficient and climate-ready.
- Reinstate the United States into the Paris Agreement and engage leaders of major GHG-emitting nations in a summit to join with the United States in adopting more ambitious national pledges to reduce carbon emissions (which, initially, will likely be non-binding).
- Commit that every federally funded infrastructure investment will reduce climate pollution.
- Review the Environmental Protection Agency’s final rules that (a) limit the agency’s ability to consider scientific research where the raw data is not completely public, and (b) allow a “major source” of hazardous air pollutants to reclassify as an “area source” at any time after acting to limit emissions.
- Require any federal permitting decision to consider the effects of GHG emissions and climate change.
- Bar new oil and gas leases on federal lands and apply the Endangered Species Act and National Monuments Act to limit lands open to development.
Propose legislation to:
- End fossil fuel breaks and begin transitioning away from the oil industry with a goal of net-zero carbon emissions by 2050.
- Create tax incentives for renewables, electric vehicles and energy efficiency.
- Pass stimulus, tax and infrastructure legislation. Request Congress to pass more stimulus legislation to help suffering Americans by giving them the balance of their coveted $2,000 coronavirus payments. It appears that President Biden is planning to take at least a first shot at getting a full 60+ majority vote for the $1.9 trillion bill. The administration will also push for a tax and infrastructure plan, which is part of Biden’s “Build Back Better” programme, later in the spring.[6] The tax and infrastructure package is expected to focus on:
- Rebuilding America’s crumbling infrastructure, from roads and bridges to green spaces and water systems to electricity grids and universal broadband.
- Creating 1 million new jobs in the American auto industry, domestic auto supply chains and auto infrastructure, from parts to materials to electric vehicle charging stations.
- Providing every American city with 100,000 or more residents with high-quality, zero-emissions public transportation options through flexible federal investments.
- Integration with the climate plan, e.g., upgrading four million buildings and weatherising at least two million homes over the next four years to meet the highest standards of energy efficiency, and upgrading federal vehicles from gas to electric.
- Funding the plan with a $3 trillion tax increase through raising corporate rates to 28%, eliminating the 20% pass-through deduction for qualified businesses, raising individual rates on the “wealthy” (the top 1% or those making more than $400,000), and taxing capital gains at individual rates, or 39.6%, effectively doubling rates.
- Undertake focused initiatives to create jobs. Initiate targeted business initiatives to create millions of manufacturing jobs through tax incentives:[7]
- Require “Buy American” in federal procurement programmes.
- Retool and revitalise American manufacturers through specific tax incentives (tax credits), tax disincentives (clawbacks of tax incentives if jobs are offshored overseas), additional resources and new financing tools.
- Invest in R&D and breakthrough technologies – from electric vehicle technology to lightweight materials to 5G and artificial intelligence (AI) – to unleash high-quality job creation in high-value manufacturing and technology.
- Focus investments to reach all of America’s communities and workers across all states and regions with historic investments in communities of color and an emphasis on a “restart package” for small businesses to retain and rehire.
- Promote onshoring by bringing back critical supply chains to America to reduce dependence on other countries for the production of critical goods (e.g., PPE, drugs) in a crisis.
- Address systemic racism and growing economic inequality. On the social and racial equity reform front, deliver on Biden campaign promises around addressing systemic racism and growing economic inequality:[8]
- Address the economic effects of the pandemic and the economic distress it has wrought on Black, Hispanic, Asian and Native American communities and businesses by spurring public-private investment through a new small business opportunity plan.
- Reform opportunity zones to fulfill their promise.
- Make a historic commitment to equalizing federal procurement, investing in homeownership and access to affordable housing for Black, Asian, Hispanic and Native American families.
- Achieve equity in management, training and higher education opportunities connected to the jobs of the future, ensuring workers of color are compensated fairly and promoting diversity and accountability in leadership across key positions in all federal agencies.
- Work with Congress to pass police reform legislation, including a nationwide ban on chokeholds, stopping the transfer of weapons of war to police forces, improving oversight and accountability to create a model “use of force” standard, and creation of a national police oversight commission.
- Take bold action to reduce the prison population, create a more just society and make communities safer by (a) eliminating racial, gender and income-based disparities in the criminal justice system, (b) ensuring fair sentences, (c) offering second chances, and (d) reducing violence in communities and supporting survivors of violence.
- Reverse prior administration’s decisions on immigration. Take a number of steps to roll back the Trump era decisions on immigration, including but not limited to:[9]
- Increasing the number of refugees allowed to immigrate to the United States each year.
- Issuing an executive order rescinding the travel ban on almost all travel from some Muslim-majority countries and ordering the Department of Justice to cease defending the ban in court.
- Halting further construction of the border wall.
- Reinstating the Dreamers by having the Department of Homeland Security issue a memorandum reversing the 2017 memorandum that attempted to dismantle DACA.
- Having the Attorney General reverse the so-called Sessions Memo and returning U.S. asylum policy to what it was before the Trump administration.
- Signing an executive order reinstituting enforcement priorities for ICE agents to target illegal aliens with criminal records.
- Signing an executive order rescinding the Trump administration’s immigrant detention-expanding directive and banning any new private prison contracts.
- Empower workers and unions. Focus on strengthening worker organising, collective bargaining and unions:[10]
- Check the abuse of corporate power over labour and hold corporate executives accountable for violations of labour laws.
- Encourage and incentivise unionisation and collective bargaining.
- Ensure that workers receive appropriate pay, benefits and workplace protections, e.g., $15/hour federal minimum wage, benefits and protections for “gig economy” workers classified as “independent contractors, etc.”
The above themes do not cover other matters the Biden campaign promised to address. For example, on the geopolitical front, the new administration intends to transition foreign policy to a multilateral approach in dealing with geopolitical tensions with China, North Korea and Russia, and rejoin the 2015 Iran nuclear deal. It also plans to initiate a different approach to trade policy, including renegotiating the Trans-Pacific Partnership as part of a multilateral strategy to restrain China, while also coping with protectionist headwinds. Expect the Federal Communications Commission to be charged with taking a stance on net neutrality. In addition, it is expected that President Biden will sign an executive order saying no member of the administration can influence any Justice Department investigation.
Appendix B
Impact on Select Industry Sectors
There are winners and losers in any change in the White House. Below we comment on the potential implications of a Biden administration on various industry sectors and the 117th Congress. While the House and Senate are both controlled by the Democrats, the majority advantage is razor thin. Not only may this reality of divided government pose limitations on the extent to which progressive legislation can be passed, but it also could pose limitations on the extent to which any legislation can be passed.
Below is a summary of possible winners and possible losers from the Biden presidency and Democrat-controlled Congress:
Consumer Products
Construction
Renewables
Telecommunications
Banking and Capital Markets
Defense
Oil and Gas
Shipping
Technology
Airlines
Automotive
Healthcare
Industrials
Insurance
Pharmaceuticals
Utilities
Below is an analysis and supporting commentary discussing each of the above sectors, largely based on reviewing the Biden campaign’s policy statements. In our analysis, we did not comment on changes in tax policy, as discussed above, unless there is a unique aspect applicable to a particular sector.
Possible Winners
Possible Losers
- Requiring aggressive methane pollution limits for new and existing oil and gas operations.
- Demanding a worldwide ban on fossil fuel subsidies.
- Pursuing a global moratorium on offshore drilling in the Arctic and reestablishing climate change as a priority for the Arctic Council.
The tech giants have become a lightning rod for both political parties and for different reasons. Biden’s campaign asserted that the large technology companies have “not only abused their power, but misled the American people, damaged our democracy and evaded any form of responsibility.”[22] Now that Democrats control the House and the Senate, the industry can expect changes to come from the likely nomination of more liberal leadership at the FTC, FCC, DOJ and other agencies, as well as major congressional committees being chaired by Democrats.
Several industry-related issues are likely to come under scrutiny:
Antitrust Legislation: High on the agenda are changes to antitrust law that make it easier to block mergers or force companies to modify how they do business. Expected to lead the Senate Antitrust committee, Senator Amy Klobuchar has introduced legislation in the past that would make it easier to prosecute big tech companies, or any company with greater than 50% market share, under antitrust law by shifting the burden of proof from the government to companies in certain cases. In addition, Subcommittee Chair David Cicilline plans to, among other things, expand the FTC’s authority to collect data from companies to assess their market power.
Privacy Legislation: Expect the Democrats to push to bring U.S. privacy rules closer to standards adopted in Europe and by the state of California, giving consumers the right to know how their personal information is collected and used.
Content Moderation: There is interest in forcing tech companies to more closely moderate content on their respective sites. Interestingly, Amazon has stopped hosting Parler given content moderation issues and Apple has removed Parler from its app store.
Section 230: The Democrats are expected to shift the debate around Section 230 of the 1996 Communications Decency Act, which shields internet companies from lawsuits over content posted by users on their sites, from whether it allows tech companies to censor conservative views to requiring internet companies to be more aggressive in moderating political speech to weed out disinformation.
Net Neutrality and Broadband Access: The FCC will be charged with taking a stance on net neutrality (an Obama era reform that sought to prevent internet service providers from favoring some internet traffic over others, e.g., users and businesses can’t pay for a “fast lane” or to slow down another website’s traffic). This issue has become even more important during remote work and distance learning due to the pandemic, especially in rural areas.
Status of Gig Workers: The Labour Department will face questions about whether gig workers should be classified as “employees” under federal law, which will affect companies like Uber, Lyft, DoorDash and Instacart.
H-1B Restrictions: The technology industry has long championed expanding the H-1B Visa programme to recruit highly skilled workers from overseas who are not available domestically in the volume required. The Biden administration is expected to reform the Trump administration’s H-1B system and work toward eliminating limitations on the number of green cards the government issues each year. However, with control of both chambers of Congress, Democrats could pursue more comprehensive reforms, like the path to citizenship for “Dreamers,” as well as expand high-skilled immigration and fast-track permanent residence for people on student visas in STEM fields, similar to the policies pursued in 2013 but failed in what was then a Republican-controlled House.
The above topics will command the most attention in the industry. Other topics include tackling issues of perceived discriminatory algorithms and biased facial recognition technology, regulating digital political ads, and considering the establishment of a new federal agency to regulate tech companies.
Mixed
The new administration is unlikely to stem the trend over recent months toward compressing global supply chains through reshoring and near-shoring, with an objective of reducing dependence on other countries for critical materials and components in future crises. The last two elections have been won and lost in the rust belt states, and failure to bolster and strengthen American manufacturing and innovation with a focus on jobs could impact the presidential election in this region yet again in 2024. The Biden campaign dismissed Trump’s “Made in America” mantra – largely because foreign investment outpaced domestic investment and American manufacturing exports have declined – and embraced its own mantra, “Made in All of America.” Accordingly, the new administration is expected to support policies that will build a strong industrial base and small-business-led supply chains that will retain and create millions of jobs across the country.
These policies will encourage investing in manufacturing and technology to make in America many products currently being imported. Industrial revitalisation will be driven by taxpayer-funded government procurement of American products to support American jobs, reduced dependence on China and other countries on critical items, tightening up “Made in America” advertising, and multilateral efforts with allies to address trade abuses that put American products at a disadvantage. An important part of this effort will be to enact legislation that would increase worker bargaining power to drive up wages and secure stronger benefits.
The president also promised during the campaign to enact a national strategy around developing a low-carbon manufacturing sector in every state with accelerating cutting-edge technologies and reskilled/upskilled workers. The plan would make available tax credits and subsidies to businesses to upgrade equipment and processes, invest in new or expanded facilities, and deploy low-carbon technologies.
- As Trump’s tax cuts enabled the industry to be more competitive with foreign insurers, Biden’s focus on raising corporate taxes could unlevel that playing field.
- As Biden tackles climate change with a package expected to focus on mitigation, energy and infrastructure, look for the industry to keep a keen eye on how that package affects key industries with the related impact on underwriting appetite and risk-based pricing.
- Once the pandemic began last year, P&C providers resisted demands for business interruption claims stemming from COVID-19 lockdowns, asserting that such losses were not anticipated in their policies. As the industry continues in “war footing” mode, it will be interesting to see whether it can garner support in a Democrat-controlled Congress for its position that pandemic risk is not insurable.
- On a positive note, the political risk insurance market may get a boost with the change in direction with an opportunity to offer credit and political risk insurance to manage geopolitical threats to business.
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