It is 7:44 AM on BFM Business and RMC Live. Our guest this morning is Thomas Buberl. Hello, you are the CEO of AXA, one of the largest insurance groups in Europe and even globally. We have many topics to discuss. I'll start with the global economic outlook from the IMF, which we were commenting on a few moments ago. What we see is that it will be very complicated for the Middle East, somewhat complicated for Europe and even France. We are in a good position. But for the United States, everything is fine. How do you analyze it? What is your global vision of the economy?
Hello Lor, first I am very happy to be with you. Of course, the United States are very strong, but in the US, it is the effect of AI that strengthens the American economy. If you remove AI, you have exactly the same picture as you have in Europe and elsewhere. And certainly the major conflicts and geopolitical risks will not help to boost growth.
Last night, we had positive signals from Donald Trump who on Fox News said that the conflict is close to an end, that negotiations could take place within two days. So are you optimistic? Do you also say to yourself, 'Well, it's over, we'll move on to something else'?
No, I mean it's not going to be over. We are talking about the fact that the United States will withdraw, but that doesn't mean the conflict will be over. This region is now very unstable. We have many actors in the region who are integrated into this war, and for me this region will remain unstable for a very long time, with ongoing difficulties for global trade, maritime trade.
I've heard a lot about these insurance premiums for ships that have sometimes multiplied by 10. When premiums reach ten times, is the goal not to move, not even to try a passage?
No, but it is clear that it is very tense, and we are talking about war coverage through basic coverage. Of course, war coverage is now heavily involved because of this war. We stand by our clients. We will help our clients as much as possible to get through this difficult period because the blockades are now multiple. But I still have hope that we will find a solution because no one has an interest in the medium term in blocking this passage, because the second-order implications regarding inflation, the impact on value chains, we will all feel them.
But is Donald Trump a risk that you can insure? That is, today we see everyone asking for insurance on political risk, on climate, but can we insure against Trump?
Certainly, there is more Trump risk. No, today the reality is that geopolitics has become very complex and also the risk environment has become very complex because we have many more risks, risks are much more interconnected, and that makes the equation much more difficult. That is why having a good view of these risks and understanding them better is what we all need to do to understand how we can better manage.
But how do you support companies? Because they have this demand for insurance against geopolitical risk. But you have to do it case by case. How do you insure against such a broad risk?
So against geopolitical risk, we can hardly insure, but we have to work on prevention. Many companies today are not aware of their risks. The first issue is to understand the risks, to understand what it means for their company, the existence of the company, and then see what we can do, particularly in terms of prevention, to avoid geopolitical risks because whether you are in a country or not, that is your choice, and to really think in the company's strategy how we can do prevention against these risks.
Do you feel that sometimes companies lack this awareness?
No, we still need to work on it. Absolutely, because this is new. We are coming out of a period of great tranquility. For 40 years, we had a few risks. After that, it was calm. Now, all of a sudden, you have risks everywhere all the time, it never stops. And really helping companies understand this jumble of risks and what the implications are. For me, that is the first task, and the second task is to say what we can do to help our clients in the prevention of these risks because settling a claim is good, but preventing and avoiding it is even better.
Another risk that has been rising recently is the issue of private credit. In Europe, we are less exposed than in the United States, but the Governor of the Bank of England has warned against the risk of minimizing recent bankruptcies. You publish your exposures: 69 billion euros, that is 15% of the total. What type of assets are you exposed to, and what is your analysis of this potential risk of contagion?
We have certainly experienced great growth in private credit because this private credit was previously on the balance sheets of traditional banks, and a new private credit sector has been built. Of course, many investors have engaged in it, including insurers, but as you said, AXA is very little exposed relative to its competitors. And we have certainly invested in very high-quality parts. Everything happening today around Iran, around geopolitical risks, will not help to avoid tensions in this sector because if rates rise, if inflation rises, it will be more difficult for this sector. That is why everyone is talking about the geopolitical risk of Iran, but we must not forget this private credit risk.
But does it worry you or not? Because the actors we receive here often say, 'It's an American issue, it's not a European issue.' Do you share that point of view?
