In a world that feels more unpredictable by the day, who craves a crystal ball more than insurers? From climate disasters to political shocks, risk is everywhere – and for insurance companies, reading the future isn’t a luxury – it’s the business model.
To understand how they’re making sense of it all, Monocle sat down with Gilles Moëc, chief economist at AXA Group. The French insurance giant operates in some 50 countries and Moëc leads the in-house team tasked with spotting trouble before it hits.
He splits his time between Paris and London, and is disarmingly calm for a man who describes his job as “worrying constantly”. We asked him about climate policy, the return of Trump, AI and whether Europe’s big defence spending spree might actually be a good thing.
What does your day-to-day look like as chief economist?
Producing scenarios and worrying constantly is a definition of what I do. Insurers tend to stress about “what-ifs”. For instance, we pay a lot of attention to the global fight against climate change, which is one of the most critical drivers shaping the world economy today.
It’s now half a year into president Donald Trump’s second term. How worried are you about the backlash against renewable energy in the US?
The understanding back in October and November of last year was that although some of the Biden administration’s subsidies for solar and wind power would be eliminated, most of the decarbonisation efforts would continue because many of the projects were going to be implemented in Republican states. Now that we have the final version of the ‘big, beautiful bill’, we know that most projects are going to be dead in the water. During the first mandate, there were no big changes in the speed of decarbonisation. This time, it looks different.
Do you see environmental concerns and decarbonisation falling behind in the pecking order in Europe as well?
I’m quite optimistic about that, because economic, environmental and geopolitical interests are aligned across Europe. The US is now the biggest producer of oil and gas in the world. Every year, Europe spends between two to three per cent of its hard-earned GDP on importing fossil fuel from the rest of the world, which puts us in a fragile position, as we saw when the war broke out in Ukraine. So for us, decarbonisation isn’t just our contribution to the fight against climate change. It’s also a way to make progress towards geopolitical sovereignty, as it is a way to save money in the future.
What are France’s economic strong suits?
Compared to many big European countries, France still has a demographic vitality that you can’t find elsewhere. The country produces a disproportionate number of global brands and companies. France is also one of the very few countries close to achieving energy sovereignty, and we can offer companies operating in the nation electricity costs that are more attractive than a lot of other locations.
What are the French economy’s weaknesses?
First, education. It used to be one of our key assets but the system has deteriorated, and it needs to be addressed because it concerns our long-term growth. The second is our ageing population. Even if we are in a better demographic position than many other European countries, we also have a fairly generous welfare system that doesn’t cope well with ageing. Taken together, these two issues are going to pose significant fiscal challenges that need to be dealt with.
How does AI fit into this picture?
France is in a fairly good position. There’s an established start-up culture and we already have an AI producer. The key is not only having companies that develop AI solutions but also ensuring their adoption. Digitalisation in general happened faster in France than in Germany, so I’m hopeful that, even if we are not among the top producers or innovators in the technique itself, we can at least adopt it quickly. You also need to have a government that allows exploration before regulating. In Europe – it’s not only a French problem – we very often have the reflex of regulating before we’ve seen implementation. This is where we need to take a hard look at ourselves.
Do you see the growing consensus that Europe needs to invest massively in its defence industry as a positive economic development?
Some extra spending will have a positive multiplying effect on our economy. Military equipment manufacturers employ high-skilled blue-collar workers at a time when there are very few sectors that do. And there will most likely be some developments in productivity.
The Apollo Program in the US, for example, had an effect not just on productivity through new research but it also forced American companies to follow some innovative management and quality-control techniques. Additional investment is not going to change the face of the European economy but it can benefit it.
At the Munich Security Conference in February, the US vice-president, JD Vance, informed his hosts that they were a wretched bunch of effete, cheese-eating milquetoasts with whom his country could no longer be bothered (I paraphrase but not that much). There has since been lots of hand-wringing about how the continent should respond to the threat of US abandonment. One of the most robust responses that I’ve heard came from the former commander of the US Army in Europe, Lieutenant General Ben Hodges. Speaking to The Foreign Desk at the Delphi Economic Forum in April, he suggested (and I paraphrase barely at all) that Europe should stop whining, recognise that it is a superpower and start acting like one.
Hodges is correct. Europe’s combined GDP and collective military spending dwarf that of Russia, its only meaningful external threat. But perhaps neither Russia nor Europe can see past the fact that, for all the supranational organisations that European countries might have joined, the continent remains a kaleidoscope of nationalities. The idea of formally uniting them is not new; it has been proposed in various forms by Winston Churchill, Leon Trotsky and George Orwell. But is its moment looming?
There are many examples of disparate democratic polities becoming one. The colonies of Australia formed a federation in 1901. The US became a unitary bloc in stages from the Declaration of Independence in 1776 to the admission of Hawaii in 1959 (and, as Donald Trump sees it, the country isn’t done yet). Indeed, many of Europe’s modern states were once disorderedly patchworks of fiefdoms.
In many respects, it doesn’t seem that difficult. Europe already has a flag, a parliament and a president. (The latter is not directly elected but that can be fixed. Who wouldn’t enjoy the sight of a Finnish candidate kissing babies in Greece or an Irish contender shaking hands in Montenegro?) Most of Europe already uses the same currency. It is true that there are cultural differences but I would contend that Poland and Portugal, for example, have at least as much in common as Alabama and Connecticut. The US turning away from Europe would have seemed, until recently, unthinkable. A United States of Europe is, at the very least, thinkable.
Mueller is the host of ‘The Foreign Desk’ on Monocle Radio.
Europeans need to understand the US – and fast. Too many of us still think that Washington’s instinct is to defend the West, and hence that Trumpism is a passing aberration. It surely can’t be normal for Americans to hate one another so much that more than half the nation voted for a leader who gabbles about annexing countries instead of opting to be ruled by liberals. But Trumpism is an extreme reset back to the US’s default position: largely indifferent toward Europe, driven by the belief that there are far more urgent matters at home to take care of. Europeans find this hard to grasp because their entire history has made it clear that the biggest threats to their lives and freedoms comes from militarised neighbours.
To understand why things look different across the Atlantic, let’s channel John Quincy Adams, the sixth president of the US and the great-grandaddy of isolationism. Imagine that what he called “this Western World” is a different planet altogether: “planet USA”. On this planet, which was originally inhabited by a small number of easy-to-evict residents, lies everything that progress requires. M, most important of which is a complete lack of dangerous neighbours. With wealth for the taking and no one to threaten the settlers, the only real battle to be fought is among the planet’s people. Despite engaging victoriously in many major battles, the US’s civil war – the war that cost the most American lives – continues to define its politics.
During the Cold War era it seemed possible that communism could forcibly unite the world under an ideologically hostile regime. As a result, the US supported all non-communist countries. In 1990 a clique of so-called neo-conservatives in Washington hit upon a breathtaking new plan: they would beam down to any troubled land on Earth and terraform it into a simulacrum of “planet USA”. As Germany’s ex-foreign minister, Joschka Fischer, told me last year, “I was once a revolutionary myself, so I knew straight away that these weren’t conservatives – they were revolutionaries.” This revolution, like so many others, didn’t go well. As a result, Americans voted to concentrate on a far older and more existential issue: the battle for their nation’s character.
If you’re on “planet USA”, why would you worry about what Russia does in its terrestrial backyard? Russia is eager for mutually profitable deals and has a defence budget smaller than that of the UK and Germany combined. Vladimir Putin is not going to take away Republicans’ guns, raise taxes on the rich or destroy law and order with “wokeness”. Only the planet’s own, treacherous “libtards” can do that. Conversely, victory for a free Ukraine won’t save DEI programmes, women’s rights or Medicare. For that, the US Democrats must beat the screaming Magas at home.
Engaging with the rest of Earth is back to being merely an option for “planet USA”. Civil war, declared or not, is what really matters. That said, we earthlings should heed another of John Quincy’s insights: America “goes not abroad in search of monsters to destroy,” it does this at home. The US isn’t planning to save us from our own monsters (again). We have to learn to look after ourselves.
Hawes is the author of several books, including ‘The Shortest History of Germany’.
