{"id":312,"date":"2025-03-13T14:31:26","date_gmt":"2025-03-13T15:31:26","guid":{"rendered":"http:\/\/www.drkarlgeorge.com\/?p=312"},"modified":"2025-05-08T15:35:03","modified_gmt":"2025-05-08T15:35:03","slug":"how-tariffs-affectpc-insurance-prospects","status":"publish","type":"post","link":"http:\/\/www.drkarlgeorge.com\/index.php\/2025\/03\/13\/how-tariffs-affectpc-insurance-prospects\/","title":{"rendered":"How Tariffs AffectP&amp;C Insurance Prospects"},"content":{"rendered":"<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/insuranceindustryblog.iii.org\/wp-content\/uploads\/2025\/03\/GettyImages-2189041576.jpg\"><img loading=\"lazy\" width=\"1024\" height=\"630\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" alt=\"\" class=\"wp-image-19747 lazyload\" data-src=\"http:\/\/www.drkarlgeorge.com\/wp-content\/uploads\/2025\/03\/GettyImages-2189041576-1024x630-1.jpg\"><\/a><\/figure>\n<\/p>\n<p>Tariffs and threats of tariffs have been roiling financial markets since January. Property and casualty insurers are no less concerned, as the cost of repairing and replacing damaged property is a driver of claim costs and, ultimately, policyholder premiums.<\/p>\n<p>Triple-I Chief Economist and Data Scientist <a rel=\"noreferrer noopener\" href=\"https:\/\/www.iii.org\/about-us\/the-team\/michel-leonard-phd-cbe\/\" data-type=\"link\" data-id=\"https:\/\/www.iii.org\/about-us\/the-team\/michel-leonard-phd-cbe\" target=\"_blank\">Dr. Michel L\u00e9onard<\/a> recently sat down to <a href=\"https:\/\/www.youtube.com\/watch?v=UvwwD-r2310\" target=\"_blank\" rel=\"noreferrer noopener\">explain the implications<\/a> of tariffs and trade barriers for insurers and what economic considerations concern industry decisionmakers.<\/p>\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\">\n<div class=\"wp-block-embed__wrapper\">\n<p><iframe loading=\"lazy\" title=\"Tariffs &amp; Insurance\" width=\"960\" height=\"540\" src=\"https:\/\/www.youtube.com\/embed\/UvwwD-r2310?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<\/div>\n<\/figure>\n<p>While property and casualty insurers write many kinds of coverage, the lines L\u00e9onard primarily discussed were homeowners and personal and commercial auto \u2013 \u201clines that have a physical emphasis on repair, rebuild, and replace.\u201d<\/p>\n<p>Lumber from Canada; cars, trucks, and parts from Canada and Mexico; and garments, furnishings, and technology from Asia all come into play when considering the prospective impacts of tariffs on replacement costs, L\u00e9onard said.<\/p>\n<p>\u201cWhen we&#8217;re focusing specifically on China,\u201d he said, \u201cwe&#8217;re looking primarily at farm equipment and alternative-energy components.\u201d<\/p>\n<p>Uncertainty around tariffs \u2013 particularly in recent weeks, as tariffs on Mexico and Canada have been imposed and \u201cpaused\u201d \u2013 makes analysis even more difficult.<\/p>\n<p>\u201cMuch depends on how much clarity there is, how much communication from the policymakers, from the administration and from the legislature,\u201d L\u00e9onard said. It\u2019s also important to remember that impacts can last well beyond their implementation and withdrawal.<\/p>\n<p>During the first Trump Administration, tariffs on soft commodities, beef, grain, and so forth had impacts for several years afterwards.<\/p>\n<p>\u201cThose tariffs were fairly short lived,\u201d L\u00e9onard said, \u201cbut for two to three years afterward farmers were uncomfortable investing in equipment at the same pace, and that reduced farmowners\u2019 insurance growth.\u201d<\/p>\n<p>Regardless of how the current discussions around tariffs play out, the Trump Administration has signaled a decided shift in policy toward greater protectionism. As a result, L\u00e9onard said, \u201cWe should expect a repositioning in our understanding of our replacement costs and underlying growth forecast for the next 12 months, at a minimum.\u201d<\/p>\n<p>He projects a period of \u201cmost likely 24 to 36 months\u201d in which growth will be slower and inflation \u2013 including replacement costs for the P&amp;C industry \u2013 will be higher.<\/p>\n<p><strong><em>Learn More:<\/em><\/strong><\/p>\n<p><a href=\"https:\/\/www.iii.org\/my-iii\/welcome\/\" target=\"_blank\" rel=\"noreferrer noopener\">Tariffs and Insurance \u2013 full video<\/a> (Members Only)<\/p>\n<p><a href=\"https:\/\/www.iii.org\/my-iii\/resources\/presentations-reports\/\" target=\"_blank\" rel=\"noreferrer noopener\">Insurance Economic Outlook<\/a> (Members Only)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Tariffs and threats of tariffs have been roiling financial markets since January. Property and casualty insurers are no less concerned, as the cost of repairing and replacing damaged property is a driver of claim costs and, ultimately, policyholder premiums. Triple-I Chief Economist and Data Scientist Dr. Michel L\u00e9onard recently sat down to explain the implications of tariffs and trade barriers for insurers and what economic considerations concern industry decisionmakers. While property and casualty insurers write many kinds of coverage, the lines L\u00e9onard primarily discussed were homeowners and personal and commercial auto \u2013 \u201clines that have a physical emphasis on repair, rebuild, and replace.\u201d Lumber from Canada; cars, trucks, and parts from Canada and Mexico; and garments, furnishings, and technology from Asia all come into play when considering the prospective impacts of tariffs on replacement costs, L\u00e9onard said. \u201cWhen we&#8217;re focusing specifically on China,\u201d he said, \u201cwe&#8217;re looking primarily at farm equipment and alternative-energy components.\u201d Uncertainty around tariffs \u2013 particularly in recent weeks, as tariffs on Mexico and Canada have been imposed and \u201cpaused\u201d \u2013 makes analysis even more difficult. \u201cMuch depends on how much clarity there is, how much communication from the policymakers, from the administration and from the legislature,\u201d L\u00e9onard said. It\u2019s also important to remember that impacts can last well beyond their implementation and withdrawal. During the first Trump Administration, tariffs on soft commodities, beef, grain, and so forth had impacts for several years afterwards. \u201cThose tariffs were fairly short lived,\u201d L\u00e9onard said, \u201cbut for two to three years afterward farmers were uncomfortable investing in equipment at the same pace, and that reduced farmowners\u2019 insurance growth.\u201d Regardless of how the current discussions around tariffs play out, the Trump Administration has signaled a decided shift in policy toward greater protectionism. As a result, L\u00e9onard said, \u201cWe should expect a repositioning in our understanding of our replacement costs and underlying growth forecast for the next 12 months, at a minimum.\u201d He projects a period of \u201cmost likely 24 to 36 months\u201d in which growth will be slower and inflation \u2013 including replacement costs for the P&amp;C industry \u2013 will be higher. Learn More: Tariffs and Insurance \u2013 full video (Members Only) Insurance Economic Outlook (Members Only)<\/p>\n","protected":false},"author":1,"featured_media":314,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[12],"tags":[],"_links":{"self":[{"href":"http:\/\/www.drkarlgeorge.com\/index.php\/wp-json\/wp\/v2\/posts\/312"}],"collection":[{"href":"http:\/\/www.drkarlgeorge.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.drkarlgeorge.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.drkarlgeorge.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/www.drkarlgeorge.com\/index.php\/wp-json\/wp\/v2\/comments?post=312"}],"version-history":[{"count":2,"href":"http:\/\/www.drkarlgeorge.com\/index.php\/wp-json\/wp\/v2\/posts\/312\/revisions"}],"predecessor-version":[{"id":315,"href":"http:\/\/www.drkarlgeorge.com\/index.php\/wp-json\/wp\/v2\/posts\/312\/revisions\/315"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.drkarlgeorge.com\/index.php\/wp-json\/wp\/v2\/media\/314"}],"wp:attachment":[{"href":"http:\/\/www.drkarlgeorge.com\/index.php\/wp-json\/wp\/v2\/media?parent=312"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.drkarlgeorge.com\/index.php\/wp-json\/wp\/v2\/categories?post=312"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.drkarlgeorge.com\/index.php\/wp-json\/wp\/v2\/tags?post=312"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}