How Trump's New Tariffs Could Affect UK Insurers

With the new round of Trump tariffs coming into effect on 7th August, UK insurers—particularly those with exposure to global supply chains and specialty lines—should prepare for a knock-on impact.

At LBH Insurance, we're closely monitoring how these developments will shape the insurance landscape in the UK and London markets. Here's what businesses and brokers need to know.

1. Higher Claims Costs

Tariffs on imported goods like car parts, electronics, and construction materials mean that the cost of repairs and replacements is set to rise.

Motor Insurance: More expensive imported parts = higher repair costs

Home & Commercial Property Insurance: Claims involving imported materials will cost more to settle

Engineering & Tech-Heavy Sectors: Delays and cost inflation could impact downtime and replacement timelines

2. Pressure on Premiums

As claims costs rise, insurers may respond by raising premiums—particularly across sectors where imports play a key role.

Specialty lines such as:

  • Marine Cargo
  • Cyber
  • Aviation
  • Tech & Electronics

…are especially vulnerable due to their global risk dependencies.

3. Business Interruption (BI) Risks

Tariffs can slow or break supply chains, increasing the likelihood and severity of business interruption claims—especially in:

  • Manufacturing
  • Wholesale and Retail
  • Logistics and Transport
  • Insurers covering BI may start tightening wordings or adjusting limits to manage their exposure.

4. Trade Credit & Surety Strain

  • Tariffs can also affect businesses' ability to pay international suppliers, leading to:
  • More defaults and late payments
  • Rising claims under trade credit insurance
  • Increased demand for surety bonds, particularly those tied to customs and deferred tariff payments

These areas are under close watch by underwriters concerned about creditworthiness and global payment risk.

5. Market Volatility

A broader economic slowdown, spurred by tariff uncertainty, may weaken insurers' investment returns and solvency ratios.

According to Fitch Ratings, key risks include:

  • Foreign exchange (FX) volatility
  • Lower asset valuations
  • Declining reinvestment yields

These pressures may affect how UK insurers price risk and manage capital reserves—especially for long-tail and capital-intensive lines.

6. London Market Exposure

The London insurance market writes close to 10% of global specialty risks, with deep exposure to US economic conditions.

US-originating risks make up a large share of London's re/insurance portfolio

Rising costs and supply chain volatility in the US could ripple into UK-based reinsurers and syndicates

This is especially relevant for:

  • Marine and cargo
  • Aviation
  • Energy
  • Tech and manufacturing-focused D&O or PI

What Can UK Businesses and Brokers Do?

Even in a shifting economic climate, there are ways to stay ahead of the market.

At LBH Insurance, we work with a wide network of insurers and specialist underwriters. This means we can:

  • Negotiate better terms, even in a hardening or volatile market
  • Tailor insurance solutions for businesses exposed to import risk
  • Advise on policy structures that protect against BI, credit, or supply chain disruption

Need a Competitive Quote or Policy Review?

Whether you're managing a manufacturing firm, a logistics business, or a professional service exposed to global markets, now is the time to reassess your coverage.

Call our specialist team on 01702 347889 for advice or a no-obligation quote.

In an uncertain market, the right insurance advice makes all the difference.

Call us on 01702 347889 for a no-obligation, competitive quote—and peace of mind that your cover reflects both your risk and your reputation or email enquiries@lbhinsurance.co.uk.