US Insurance: Tariff Impact Risk Spectrum

In this note we speculate as to which insurers may be more and less susceptible to the direct and indirect effects of the new tariff regime. We touch on P&C, Life, Health, and Mortgage insurers, and briefly discuss insurance brokers, as well.

Domestic auto and home insurers appear to be at a higher risk level, while life insurers with significant exposure to equity market conditions and the interest rate environment should be observed closely. On the lower end of the risk spectrum are insurance brokers and health insurers.

Retail auto and home insurers face direct exposure to current tariff policies due to their connection to import costs. Tariffs may lead to increased auto and home part costs, higher replacement costs, and potential delays in repair/replacement due to supply chain disruptions. Life insurers, while generally shielded from the direct effects of tariffs since they do not sell physical goods across borders, remain sensitive to secondary effects related to the interest rate environment, equity market conditions, employment trends, and the broader macro environment.