Take the long view as tariffs bite, says financial chief Charles Brindamour

Risk managers must take a long-term view of operational strategy as geopolitical shifts continue to reshape the business landscape, the chief executive of Intact Financial Corporation has warned.

Speaking during the opening keynote at the Airmic conference in Liverpool, Charles Brindamour said the tariffs introduced by the US government should be viewed as a lasting shift in global trade – not a temporary disruption.

Tariffs are here to stay

“Geopolitical risks are one of the three biggest risks we see in the current and future world,” said Brindamour. “They, alongside climate and technology, are the three biggest future risks and I believe that will fit with the view of many of you in this room.”

He urged delegates to distinguish between short-term disruption and longer-term structural shifts. “What you need to figure out when it comes to geopolitical risks [is] what is temporary and what is permanent,” he said. “While those temporary impacts have to be addressed you have to put your energy into what is permanent.”

Pointing to global electoral cycles and the policy direction of the United States in particular, he warned that protectionism and political instability would have far-reaching economic effects.

“Last year two in three of the world’s population had the opportunity to vote and we have seen huge change – none bigger than in the United States given its ability to impact everyone,” he said.

“If we focus on tariffs, which are the biggest move made by the United States administration so far, the big question mark is the risk it will place on the dollar within the global financial architecture.

“It also puts pressure [on] our ability to rely on and trust each other when trust is based in the rule of law.”

Lower growth, higher inflation

Brindamour said his base-case scenario is that the US tariffs will be upheld.

“The tariffs will be tested in the courts, but we believe they will be permanent. They will stay; they may be lower than we expect but they will prevail. We do not believe the administration would go in the face of the Supreme Court,” he said.

“What do tariffs mean for nations across the world? My view is the impact will be lower growth and higher inflation. We have seen the forecast for global growth reduced from 2% to 1.5%. That equates to a 25% fall in global growth.”

He added that businesses are already responding by shifting investment priorities. “What our clients and your clients will do is put greater emphasis on growth and they may see a move to investment in greater levels of technology to reduce costs.

“Supply chains are already being disrupted, and the pressure will be maintained.”

While he acknowledged that tariffs may be a “sideshow” for insurers, he stressed that the economic consequences would be real for customers. “Risks are up, there is no doubt about it,” he said.

Staying competitive in a volatile world

Reflecting on Intact’s own performance, Brindamour shared lessons learned over the past 15 years. “We have always believed where there is adversity there is opportunity and that remains the case,” he said.

“We have based our operational strategy and growth on a strong moral compass. However, that comes with the notion of a clear focus on outperforming our peers both in terms of service delivery and financial performance.”

He said the company’s long-term strategy had enabled it to deliver consistent results. “We have sought to deliver that and having done so it has allowed us to grow our earnings 10% on average year in year for the past 15 years.”

Looking ahead, he urged risk managers to keep their eyes on future trends rather than short-term volatility. “This comes with the need to have a long-term game plan. Our focus is not on the now – it is on where the world and where our customers are going.

“We operate on where the world is going and how that can impact and improve our performance.”