In the days following President Donald Trump’s “Liberation Day” tariffs, the S&P Insurance Select Industry Index fell more than 12%, with reinsurance and property and casualty (P&C) businesses bearing the brunt of the fall.
Year-to-date, the reinsurance sector has fallen 16%, according to Yahoo Finance, followed by the life insurance sector’s 13.6% decline. Key property and casualty (P&C) insurers have also suffered significantly.
Economic pressures and natural disasters strained insurance companies in the run up to the tariffs, which served to tip the scales towards a more widespread decline. Below, Insurance Business+ takes a look at some of the lines of business that have suffered the most.
Yahoo Finance data reveals a 13.4% fall in the reinsurance sector in the first five days following the tariff announcement. It has since risen slightly and currently sits 12.1% below pre-tariff levels.
Reinsurance broker Gallagher explained in a that hurricanes Milton and Helene and the Los Angeles wildfires have pushed natural catastrophe losses higher in recent months, citing elevated reinsurance costs since 2023 as well as a 17% return on equity (ROE) for full-year 2024, down from 19.5% the year before.
On the back of these headwinds, the “Liberation Day” tariffs sparked enough uncertainty in the market to prompt a series of stock declines among reinsurers, with Reinsurance Group of America suffering the greatest decline among its peers.
The Missouri-based company’s stock fell 15.9% from the day the tariffs were announced until close of trading on Tuesday. Reinsurance Group of America primarily specializes in individual and group life and health insurance products.
RenaissanceRe Holdings, which provides reinsurance products across the property and casualty and specialty segments, was a close second. The Bermuda-based company suffered a 10% stock price decline over the same period.
The property and casualty sector similarly fell 11.1% in the first five days following the tariff announcement, according to Yahoo Finance data, having since risen slightly to 9.9% below pre-tariff levels.
Insurers in this space fear that the newly introduced tariffs will push the cost of certain goods such as cars and car parts, as well as materials such as steel, aluminum and lumber higher. This in turn is anticipated to increase the cost of claims for insurers, a heavier weight that will ultimately be borne by consumers in the form of higher premiums.
The greatest losses in this sector came from Cincinnati Financial Corporation, which suffered a 14.1% slide in its stock price from the day the tariffs were announced until close of trading on Tuesday. The company specializes in property and casualty insurance products through its commercial, personal, excess and surplus, and life insurance segments.
Los Angeles-based Mercury General Corporation, which primarily offers auto and homeowners’ insurance in addition to various commercial insurance products, suffered a similar 12.1% decrease over the same period.
Lastly, the life and specialty insurance segments fell 15.7% and 12.4%, respectively, in the first five days following the tariff announcement, according to Yahoo Finance data. Despite both sectors seeing momentary spikes upwards, they remain 15.7% and 12% below pre-tariff levels, respectively.
Various economic pressures such as inflation and the cost of living squeeze have ultimately led to higher lapse rates as consumers cancel or opt not to renew their life insurance policies to save money, a trend compounded by challenges with regulatory compliance in an ever-changing landscape.
For the life insurance sector, New York-based MetLife’s stock declined some 19.1% from April 2 until close of trading on Tuesday.
Similarly, specialty insurance provider Assured Guaranty faced a 12.2% stock price decline over the same period.
