The introduction of the US administration’s tariffs is expected to indirectly affect the UK insurance sector, primarily through the impact of tariffs on economic growth and insurance claims supply chains. Insurers, particularly those with international / US exposure, face decreased insurance demand in trade-sensitive industries like manufacturing and transport, alongside increased claims volatility and disrupted supply chains. Financial market volatility has also affected insurers’ balance sheets, with potential impacts to investment performance and income. Rising costs from tariffs on Chinese exports will impact property and motor damage claims, leading to potential premium increases and / or new claims fulfilment solutions. Insurers must reassess risk appetite, adapt pricing and innovate to address these challenges. Short-term strategies include pricing adjustments and supply chain diversification, while long-term plans may also emphasise product innovation. Leveraging digital and data capabilities will support successful insurers’ abilities to make the required strategic changes at pace amid this market uncertainty.
