Trump’s Executive Orders: An Actuarial View of Risks, Opportunities, and the Role of Risk Professionals in Navigating Change

On January 20, 2025, President Donald Trump signed a series of executive orders aimed at reshaping U.S. policies on energy, international agreements, trade and public health. From energy independence and international environmental agreements to public health and trade policy, these actions began to disrupt industries, global markets and diplomatic relations. They also create a complex risk landscape that demands careful analysis and proactive management.

As the world reacts, I’m reminded that the role of risk professionals is pivotal in helping organizations navigate change. By evaluating the downstream implications of policy decisions, organizations can anticipate disruptions, adapt strategies and identify opportunities for growth.

Whether it's assessing the impact of tariffs on supply chains, recalibrating models for climate-related risks, or supporting sustainability strategies in response to shifting regulatory frameworks, actuaries and other risk pros are uniquely equipped to provide actionable insights and strategies that guide our organizations and communities forward.

Dominic Lee of SAS

With that in mind, I offer this non-partisan analysis of the potential risks and opportunities presented by four of the most significant executive orders issued on this year’s Inauguration Day.

Then we’ll examine the critical role of actuaries in addressing impacts and driving positive outcomes.

Recognizing that the executive orders have provoked strong reactions by supporters and opponents alike, I’ll emphasize that my intent is not to advocate for or against specific policy decisions. Rather, my goal is to objectively highlight where actuaries can add value in a changing risk landscape.

Also, while this exploration of risks and opportunities is framed through a U.S. lens, the actuarial insights and strategies outlined are broadly applicable on a global scale.

A risk management view of key executive orders and their global implications:

1. Withdrawal from the Paris Climate Accord

The U.S. officially exited the Paris Climate Accord, citing economic sovereignty and reduced regulatory constraints for industries.

The risks

• Strained international relationships are a given. Allies like the EU, which have committed to aggressive climate goals, view this as a step back from shared accountability.

• The energy sector, responsible for 25% of emissions, could face reputational damage, higher insurance premiums and restricted access to international markets that prioritize low-carbon suppliers.

The opportunities

• Industries may now have greater flexibility to prioritize innovation without compliance costs tied to Paris. For instance, U.S. natural gas exports are projected to increase by 35% over the next decade (Energy Information Administration, 2024), providing a competitive edge.
  
  
• Investments in innovative carbon capture technologies, which saw a 12% growth globally in 2023, position the U.S. as a leader in sustainable energy solutions, even outside formal agreements.

2. Withdrawal from the World Health Organization

The administration ceased U.S. membership in the WHO, redirecting funds toward domestic health programs. The U.S. previously contributed $400 million annually to the WHO, around 15% of its budget. This withdrawal will fundamentally alter its approach to global health.

The risks

• Public health crises like pandemics require international coordination. Without WHO alignment, the U.S. risks slower response times, fragmented research efforts and potential funding gaps for vaccine development.

• Pharmaceutical industries may face supply-chain challenges as global partnerships become less accessible.

The opportunities

• Reallocating funds domestically could bolster Centers for Disease Control and Prevention (CDC) initiatives. For instance, U.S.-led vaccination programs already serve 20 million annually; additional funding could double outreach by 2026.
  
  
• The pivot also provides autonomy, allowing policies tailored to U.S. demographics and regional health priorities.

3. A national energy emergency

The president declared a national energy emergency to accelerate fossil fuel production, cut regulatory red tape, and reduce reliance on foreign energy sources. However, energy production decisions are primarily market-driven and do not necessarily follow government directives, meaning this order’s impact will unfold over time.

The risks

• The U.S. faces environmental liabilities, with projected cleanup costs exceeding $200 billion over the next decade (Brookings Institution, 2023).

• Additionally, regulatory uncertainty could deter international investors wary of legal volatility.

The opportunities

• Enhanced production could further lower energy costs for consumers. In 2024 alone, energy prices declined by 10% due to domestic surpluses.
• Moreover, this order sets the stage for renewable energy growth. Companies may now have room to integrate renewables into existing infrastructure with less stringent compliance demands.

4. Imposition of tariffs on imports

The Trump administration expanded tariffs beyond China, initially targeting Canada and Mexico with a 25% tariff on all imported goods and a 10% tariff on energy products. The administration’s posture suggested a broader geopolitical strategy, with evolving economic consequences that require close monitoring.

The risks

• Tariffs may strain supply chains. Industries reliant on imported components, like semiconductors, could face production delays and cost increases of up to 20%, according to research by McKinsey.

• Retaliatory tariffs might reduce U.S. exports, with the International Monetary Fund projecting a 0.8% annual GDP loss under prolonged trade disputes.

The opportunities

• Domestic manufacturing is poised for growth. Commerce Department forecasts suggest reshoring could create 100,000 jobs annually in key sectors.
• In one scenario, protected industries like automotive and consumer electronics stand to gain $50 billion in market share by 2026, potentially offsetting some economic losses.

Actuaries as Navigators of Change

Actuaries provide specialized quantitative expertise that extends beyond traditional economic forecasting. They offer risk-adjusted decision-making frameworks that account for uncertainty in ways other professionals may not. Their risk modeling capabilities are particularly valuable in industries like banking and insurance, where risks are highly complex.

Actuaries are particularly adept at:

• Quantifying economic and operational risks.

Every decision brings financial implications, and actuaries excel at uncovering them. Take trade policies. When tariffs are imposed, actuaries can evaluate inflation from tariffs, develop risk-adjusted pricing models, and model downstream effects such as how inflation impacts pricing strategies or profit margins. For energy policy shifts, they can assess the ripple effects on infrastructure investments and forecast liabilities tied to environmental cleanup costs. And with health care realignments, actuaries can evaluate how changes in global partnerships impact funding for critical initiatives, like pandemic preparedness.

• Enhancing risk models with scenario analysis.

Scenario planning is another area where actuaries excel. They craft roadmaps for every “what if” that could arise. What happens if geopolitical tensions escalate? How do shifts in energy policy affect supply chains? For example, if escalating geopolitical tensions increase the risk of state-sponsored cybersecurity and fraud threats, modeling cyber risk scenarios can help firms optimize safeguards and minimize operational disruptions. Similarly, modeling supply-chain disruption scenarios for can help firms identify alternative sourcing strategies to reduce risk exposure.

By simulating outcomes, actuaries can help organizations adapt proactively rather than reactively. Their ability to turn uncertainty into a set of actionable strategies makes them highly valued.

• Supporting long-term sustainability.

Sustainability is the foundation of any successful strategy. Actuaries can integrate climate-related risks into their models, offering insurers, investors and policymakers insights into long-term mitigation strategies. They can assess the viability of hybrid energy strategies, integrating nuclear, natural gas, solar, geothermal and tidal to balance energy security with externalities.

Beyond environmental considerations, they can assess macro risk exposures, including financial market volatility, currency fluctuations and regulatory uncertainty. They can also project economic growth and develop strategies for inflation resilience, exchange-rate stability and long-term job creation.

• Collaborating across sectors.

An actuary’s role isn’t confined to boardrooms or spreadsheets. Actuaries bridge the gap between government policies and corporate strategies. By interpreting complex data and presenting it in clear, actionable terms, they help ensure that risk mitigation efforts align with broader goals, whether it’s economic stability or societal well-being. This cross-sector collaboration is where actuarial expertise truly shines.

With the growing integration of artificial intelligence and machine learning, actuaries can enhance forecasting accuracy by leveraging AI-driven scenario modeling, machine learning algorithms for risk detection, and predictive analytics to identify trends that shape economic shifts. These advanced tools allow actuaries to provide more precise, dynamic insights, strengthening decision-making in uncertain environments.

A Forward Path Through an Actuarial Lens

While the Trump administration’s policies introduce new challenges, they may also present opportunities for innovation, sustainability, and collaboration. By fostering cross-sector dialogue, advocating for sustainable practices, and preparing for evolving risks, actuaries can help businesses and communities adapt and thrive.

Risk management transcends politics. It is a unifying discipline that enables the world to navigate uncertainty with confidence and create stability and value for all stakeholders. By maintaining a non-partisan, analytical approach and remaining committed to our shared goals of mitigating risks and leveraging opportunities, we can help find and forge paths leading to the most favorable outcomes, whatever challenges the future may bring.

Dominic Lee is a senior solutions advisor at data and AI firm SAS, where he brings his 13 years of property/casualty experience to support North American insurers in transformation and innovation. As an actuary, content creator and public speaker, he is known to the insurance community by his podcasting moniker, The Maverick Actuary.

The article above is adapted from a LinkedIn post that Mr. Lee published on the day after the January 20 executive orders. The views expressed are his own.