The insurance industry contemplates the impact of definitions on claims and consumers

Insurance and economists and commercial associations continued to consider the potential impact of President Trump’s definitions.

About a month after Trump looked at the imposition of a severe tariff on China, Mexico and Canada, the administration applied on April 2 at least 10 % on all exporters to the United States – with dozens of countries that see higher, in some cases, in some cases. a lot Top, definitions. In addition, a 25 % tariff applies to all imported cars and parts.

Since then, the stock market has been in a state of turmoil as investors deal with rumors, hear business leaders, and try to discover the final impact.

The industry’s reaction to Trump’s tariff for China, Mexico and Canada by saying that it would negatively affect the insurance industry – especially American homeowners and car insurance. David A. Sampson, CEO of American Property Insurance Association (APCIA). At that time, the Trade Association has admitted that it is “government effective tools”, but added that the customs tariff “is so wide that it is likely to hurt families, individuals and business owners who aim to protect it.

When it was reached to comment on the broader fees announced on “Liberation Day” on April 2, APCIA said consumers can see an impact on their insurance bill in 12 to 18 months, and that the organization has estimated an annual increase in the costs of personal car insurance claims ranging from $ 30 billion and $ 60 billion.

“Given the expenditures of the insurance companies outside the direct cost of the claims, it is possible that the total effect of installments is higher.” “Given the estimates are based on insurance data, given the number of drivers of non -insured cars, or those who do not have a comprehensive collision or coverage of property damage to their own car, it is expected that the total effect on consumers is expected to be higher.”

In a post on LinkedIn, Sampson said that APCIA “Federal Policy Manufacturers have been informed of the potential impact of definitions.”

It is also expected that the costs of claiming commercial cars will be affected. APCIA also called for construction insurance because materials such as steel and wood expected to increase, but many of their initial concentration on cars – with about a third of the total insurance industry installment.

Quoted by Wall Street analysts, APCIA said that the price of new cars will increase from $ 4,000 to $ 15,000. About 60 % of auto parts come from Mexico, Canada or China, and repairs will take longer if the offer does not come from other countries.

Michelle Leonard, the economist of the Institute of Insurance Information (TRIPLE-I), said economic turmoil, such as open trade “will have the most important impact on the costs of growth and basic replacement for auto and homes insurance.”

Leonard said that the effect on the price of goods is “a function of inventory levels, the ease of replacement, and margins along the product value chain” of the size of the definitions.

“In the short term, changing trade dynamics between countries can affect the availability and price of the commodity key for the insurance industry,” such as agricultural equipment, furniture, building materials and EV batteries. He also mentioned an impact on losses on other insurance lines such as guarantee, commercial credit, business interruption and political risks.

Economist Robert Hartoig, professor of finance and director of the Risk Management Center and uncertainty at the University of South Carolina, said that regardless of the definition of cars and home insurance, “Trump’s contempt for global trade” directly threatens other business lines such as Ocean Marin, internal naval, credit, and commercial credit.

“It is time to secure the executives of insurance and reinsurance, which is likely to be needed a large correction from the form of Morgan Chase, an investor, an investor by Wall Street, such as JP Morgan, participating in Phamkada, who is investing, is an investor, an investor, and she is an investor. She is invested, and she is invested, and she is invested, and she is invested, and she is invested, and she is invested, and he sees, and he, and he sees, and he, Will, from Jeep Morgan Chis, and sees. ”Perchang Square.

Mahesh Mistry, chief analyst for analyzes, said that insurance companies “must search in the scenarios” What if “, and that the agency has not yet witnessed any major transformation in the investment or subscription strategy.

“The indirect effect of the definitions may be more clear,” Mistry continued. “The general costs of commodities are likely to have an impact on insurance premiums. It will be more imminent whether the definitions create any inflationary pressure on some products. The result of definitions can be translated into broader economic implications for some countries, which affects growth, ability to withstand costs, cost of living, which can have more striking effects.”

Mistry said that market fluctuations and financial distress of business can reduce the demand for insurance, the demands of D& O responsibility and commercial credit insurance.

In his position to LinkedIn, APCIA’s sampson concern about the broader influence of American relations with other countries.

He said: “Even if the definitions are reversed quickly-although this seems unlikely-it can enhance the increasing perception of the United States as an unreliable or self-interested actor.”

Subjects
The claim market