“We hope for a softer Brexit obviously and personally I think there’s probably going to be delays as there’s so much work to be done for a Brexit,” the CEO stated.
“Swiss Re has been there for 150 years,” he added. “We’ve seen all kinds of situations, so we’re not afraid of a move like that, a country wanting to be outside of something else. We’ll find a way to deal with that overall.”
In terms of the state of the global economy, Mumenthaler expressed more concern about the interest rate environment and the potential for a damaging trade war.
“The interest rate increase overall is positive, because certainly in the west we’re in an abnormally low interest rate environment which typically is bad for insurance,” he explained, adding: “I think if you look at the economy, it’s softening slightly and obviously the biggest worry we have right now is trade war.”
Mumenthaler suggested that although extended phases of more liberal trade have had some negative side-effects, they have generally been much better for the re/insurance industry and much better for the global economy overall.
“I’m not an economist I’m a physicist,” he stipulated, “so I base my judgement on what has happened in the past and we had phases of trade wars in the past and they didn’t end well.”
Swiss Re’s stance on Brexit contrasts somewhat with the recent commentary from other financial institutions, particularly regarding the possibility of a ‘no deal’ scenario.
For example, LIIBA Chief Executive Christopher Croft recently highlighted the ongoing uncertainty surrounding brokers’ access to London and European risks post-Brexit, while Munich Re’s Chief Economist Michael Menhart suggested that the ‘closed market’ trend represented by Brexit could negatively impact re/insurers in the long-term.