Tariffs/Insurance
Insurance Industry Braces for Impact of Tariffs
AM Best's Ann Modica, APCIA's Robert Passmore and the University of South Carolina's Robert Hartwig discuss potential effects of U.S. imposed and retaliatory tariffs on insurance markets, as well as how insurers might mitigate the repercussions.*
What the New 25% Auto Tariff Means for Consumers and Manufacturers - PartsTrader
PartsTrader Blog, March 28, 2025
President Trump announced on March 26 that he will impose a 25% tariff on imported cars and car parts, effective next week, using his national security powers to justify the action.
“I think our automobile industry will flourish like never before,” Trump said in remarks from the Oval Office. This new measure is expected to significantly reshape the U.S. auto market, with wide-ranging effects on manufacturers, consumers, and insurers alike. With the tariffs set to go into effect on April 3, the market is preparing for changes that could influence vehicle prices, production strategies, and international trade dynamics; while critics and industry leaders are bracing for the economic impact, which could ripple across international trade relations and consumer prices. Even now, effects are already being felt- carmaker stocks dropped by 3-7% as the industry reacted to the news.
The tariffs will go into effect on April 3 and apply to both finished cars and trucks shipped into the United States, as well as imported parts. These tariffs will impact foreign brands, as well as American companies like Ford Motor and General Motors, which manufacture many of their vehicles in Canada and Mexico.
Nearly half of all vehicles sold in the United States are imported, and nearly 60% of the parts in vehicles assembled in the U.S. come from abroad.
Trump emphasized his commitment to the policy, stating, “This is permanent.”
Cost estimates suggest that prices for imported vehicles could rise by $4,000 to $12,000.
Greg Horn, Chief Industry Relations Officer at PartsTrader, overseeing our Product portfolio and leading data analytics. Formerly the Vice President at Mitchell International, he held senior positions in auto insurance claims at The Hartford, GMAC Insurance, National Grange Mutual, and Leader National Transport.
Trump's auto tariffs to cover more than $460 billion of US vehicle, parts imports
U.S. President Donald Trump's 25% auto tariffs will cover more than $460 billion worth of imports of vehicles and auto parts imports annually, according to a Reuters analysis of tariff codes included in a federal register notice, opens new tab on Wednesday.
The update of Trump's auto tariff proclamation from last week included nearly 150 auto parts categories that will face tariffs starting on May 3, a month after Thursday's midnight activation of 25% tariffs on vehicle imports.
The list includes tariff codes for engines, transmissions, lithium-ion batteries and other major components, along with less expensive parts including tires, shock absorbers, spark plug wires and brake hoses.
But the list also includes automotive computers covered under the four-digit tariff code that includes all computer products, including laptop and desktop computers and disk drives. The category had imports of $138.5 billion in 2024, according to U.S. Census Bureau data.
Trump Tariffs Could Lead to Higher Insurance Premiums on Homes, Cars - Barron's
BARRON'S, April 4, 2025
Americans have seen their homeowner’s and auto insurance premiums skyrocket in recent years. Now, tariffs may push those premiums higher.
New tariffs raise risk for insurers amid market volatility: LMA
Elizabeth Wooliston, Underwriting Director at the Lloyd’s Market Association, has noted that the tariffs recently imposed by U.S. President Donald Trump could have significant implications for insurers, including potential supply chain adjustments and shifts in overall profitability.
Wooliston noted that the effects on insurers will vary, as increased uncertainty and market volatility heighten business risks.
For those unaware, the U.S. administration’s latest wave of tariffs will be applied reciprocally, with a minimum threshold of 10%, based on the duties imposed on U.S. exports.
Chinese goods will face a 34% tariff, Indian imports will be subject to a 26% tariff, and the European Union will see a 20% tariff on exports to the U.S., while goods from the United Kingdom will incur a 10% tariff.
Additionally, President Donald Trump has introduced a 25% tariff on all foreign-made vehicles.
Climate/Resilience/Sustainability
Triple-I: Colorado State’s 2025 Atlantic Hurricane Forecast Calls for ‘Above Average’ Season
An above average hurricane season is projected for 2025 in the Atlantic basin, according to a forecast released today by Colorado State University’s (CSU) Department of Atmospheric Science.
This is an ideal time for homeowners and business owners to review their insurance policies with an insurance professional to ensure they have the right amount and types of coverage, allowing them to be financially protected from storm damage.
Led by CSU senior research scientist Phil Klotzbach, Ph.D., a non-resident scholar at the Insurance Information Institute (Triple-I), the CSU TC-RAMS research team forecasts 17 named storms, nine hurricanes and four major hurricanes during the 2025 season, which starts on June 1 and continues through Nov. 30. A typical Atlantic season has 14 named storms, seven hurricanes and three major hurricanes.
“The tropical Atlantic is warmer than normal, although thankfully not as warm as last year at this time,” Klotzbach said. “At this point, we anticipate either neutral El Niño - Southern Oscillation (ENSO) or perhaps weak La Niña this summer and fall. The combination of a warm Atlantic and either neutral ENSO or weak La Niña typically yields an above-average Atlantic hurricane season.”
The 2024 season produced 18 named storms and 11 hurricanes. Five reached major hurricane intensity. Major hurricanes are defined as those with wind speeds reaching Category 3, 4 or 5 on the Saffir-Simpson Hurricane Wind Scale.
AI in Insurance
Insurance Innovation Reporter Weekly Newsletter
APRIL 4, 2025
INSURANCE INNOVATION REPORTER
AI can fix everything in insurance. I didn’t say that; esteemed IIR contributors Stephen Applebaum and Alan Demers did, in our Commentary section today.
It reminds me of a favorite book of mine written by Arthur Herman: How the Scots Invented the Modern World: The True Story of How Western Europe's Poorest Nation Created Our World and Everything in It. You have to admit it's hyperbolic—but when you read on, you’re surprised at how little hyperbolic it actually is. As AI becomes more visible in everyday life, its utility to insurance becomes all the more evident. That makes talk of the technology seem less like hype and more like an urgent call to action.
AI plays an important role at Wagmo, a pet wellness and insurance company that provides a digital customer experience intended to surprise and delight. That said, co-founder and CEO Christie Horvath, whom we interviewed for today’s top story, implies that the company resists using AI where it doesn’t belong. Wagmo takes a “pretty simple” approach to customer experience, according to Horvath. “It really all starts with ‘What does the customer, what does the pet parent need and want?’” she says.
ANTHONY O'DONNELL, Executive Editor, Insurance Innovation Reporter
Insurance Industry Accelerates AI Technology Adoption
Insurance leaders embrace AI transformation to revolutionize operations, but implementation challenges persist amid growing competitive pressure, Roots finds.
A new survey of insurance executives reveals that nearly 90% identify artificial intelligence (AI) as a top strategic initiative for 2025, yet significant implementation challenges persist with only one in five companies having AI solutions running in production, according to a comprehensive survey from Roots.
Insurance executives overwhelmingly recognize AI’s importance, with 82% reporting it as a strategic corporate initiative to improve financial and operational performance. While leadership drives much of this push, innovation from within plays a substantial role, with 61% of respondents citing “team members bringing ideas to you” as a key driver for AI exploration. Competitive pressure also fuels adoption, with 44% indicating that competitors’ AI announcements influence their own strategies.
Department priorities align closely with AI capabilities, the survey found. For underwriting professionals, increasing premium growth (75%), speed to quote (53%), and lowering loss ratios (43%) top the 2025 priority list.
In claims management, improving processing efficiency (72%), reducing cycle times (64%), and increasing customer satisfaction (45%) rank highest.
IT departments have their own AI agenda, with 65% prioritizing introducing or scaling AI across the business, 48% focused on reducing operational costs, and 45% committed to modernizing technology stacks.
Insurance industry faces consumer skepticism despite recognized AI benefits, finds GlobalData survey
Global consumers unanimously acknowledge the benefits of deploying artificial intelligence (AI) tools in insurance yet are skeptical about their commercial rollout. Despite high satisfaction among users of AI tools, insurers must address trust issues and prioritize transparency, especially around AI-driven decisions and data privacy.
Building consumer confidence will be key as AI becomes more integrated into insurance operations, according to a survey by GlobalData, a leading data and analytics company.
According to GlobalData’s 2024 Emerging Trends Insurance Consumer Survey, there is a strong belief that AI can reduce queueing times to speak to insurance agents as cited by 73.8% of consumers. Meanwhile, a slightly lower proportion of consumers believe the use of AI can result in operational efficiencies (71.5%), while also citing the technology is better at pattern recognition than humans (71.2%).
Beatriz Benito, Lead Insurance Analyst, GlobalData, comments: “Despite the positive perceptions, insurers face challenges in ensuring consumers adopt AI tools. Many consumers find that the technology is not yet sufficiently developed to be adopted at scale, eroding their trust. To overcome these trust issues, insurers must prioritize transparency in AI-driven decisions, particularly among those who perceive bias in the tools, such as providing negative claim outcomes. Some consumers will have data privacy concerns, while others will simply just prefer interacting with a human.”
Despite skepticism surrounding the use of AI tools at a commercial scale, satisfaction levels among the customers using such tools are high. The survey reveals that 74.5% of customers using insurance chatbots were either satisfied or very satisfied by the experience.
Benito continues: “Most certainly, the use of AI will transform the insurance industry in several ways and will also drive operational efficiencies and cost reductions. For instance, the availability of AI tools brings a new paradigm in that assistance or customer support can be provided 24/7, while the automation of claims processing leading to reduced settlement times, will naturally be viewed favorably by consumers.”
Meanwhile, the speed and precision of AI in pattern recognition means that risks can be quantified more accurately and policies priced more fairly, while fraud detection can be improved.
Scaling gen AI in insurance | Deloitte Insights
It’s likely that no other technology offers as much transformative potential as generative artificial intelligence.*
This technology has the potential to change the way insurers operate, assess risks, launch products, and interact with customers, among other things. However, the journey toward scaling gen AI has challenges on multiple fronts. In the last year or so, many insurers have dipped their toes in gen AI proofs of concept, but despite the hype, and some initial successes, many may not yet be fully prepared to harness the full potential of gen AI. So, the question looms: How ready are insurers to scale gen AI?
In June 2024, Deloitte conducted a survey of 200 US insurance executives, of which 100 come from the life and annuity (L&A) sector and the remaining 100 from the property and casualty (P&C) sector, to assess their readiness to adopt gen AI. Survey findings reveal how insurers surveyed are preparing to move past the initial proof of concept (PoC) and experimentation stage and how they are overcoming implementation obstacles that exist to be ready to embrace and scale gen AI.
TABLE OF CONTENTS
Survey findings indicate that many insurers have taken the first steps with gen AI implementations. Seventy-six percent of the respondents say they have already implemented gen AI in one or more business functions. L&A insurers appear to be slightly ahead, with 82% of L&A respondents saying they implemented gen AI in one or more business functions, compared with 70% of P&C respondents. There also seems to be a positive correlation between implementation and the size of the organization, with higher rates seen in larger-sized organizations (figure 1).
Embedded Insurance
Allianz Australia partners with carsales
Online car marketplace carsales announced a partnership with Allianz Australia to offer car insurance to shoppers on the platform.
Founded in 1997, carsales is part of publicly listed CAR Group and it claims to be the leading car sales platform in Australia.
carsales will leverage the Allianz API to present insurance offers on its platform.
Canada
Why home insurance falls short as climate disasters rise
Extreme weather events once considered rare are now a regular threat. Insurers are redrawing risk maps and rewriting policies to reflect a harsher climate reality.
When it’s a weather problem, it becomes a financial problem. As climate disasters cause damage reaching $50,000 or more per home, insurers are being forced to reassess how they operate, according to Square One Insurance CEO Daniel Mirkovic (pictured).
In fact, the average cost per natural disaster in Canada has surged by 1,250% since the 1970s, escalating from approximately $8 million to over $110 million per event, according to the Insurance Bureau of Canada.
Rising construction costs are widening the underinsurance gap, with residential building construction costs increasing by 66% since 2019, significantly outpacing the 19% general inflation rate during the same period.
But Canada’s guaranteed building replacement coverage offers a rare safeguard. In Canada, guaranteed replacement cost coverage ensures that a home can be rebuilt or repaired to its original state after a covered loss, regardless of the cost, offering a safeguard against rising construction expenses.