Kim Ga -hyun, a Research Fellow and Researcher at The Insurance Research Institute, stated in a report on the impact of Trump’s tariff policy on the domestic insurance industry, “The Trump administration’s entire tariffs are increasing the uncertainty of the international economy and the reduction of exports and economic slowdown in major trading countries including Korea.”

the non -life insurance sector is notably vulnerable due to its close ties to industries directly affected by tariffs, including automobiles, construction, and exports. This exposure could lead to increased loss rates stemming from rising costs,heightened risks,and challenges in managing assets.

For auto insurance,the rising cost of imported parts is expected to drive up repair expenses,afterward leading to higher premiums for consumers.

Construction and fire insurance are also facing challenges. Increased import costs for essential building materials like steel and wood are contributing to higher construction and reconstruction expenses. This, in turn, increases potential losses due to larger insurance payouts in the event of accidents.

the report further notes that increased global trade uncertainty will likely lead to higher loss ratios for transportation and export insurance,adding further risk factors.

Life insurance businesses are also susceptible. Their structural sensitivity to economic fluctuations and interest rates exposes them to risks such as contract reductions, lower asset management yields, and deterioration in K-ICS (Korean Insurance Capital Standard).

A slowdown in economic growth is projected to stagnate new contract inflows for security and savings life insurance products. Furthermore, declining returns on long-term investment products, such as variable insurance and pension insurance, could increase policy termination rates, negatively impacting insurance companies’ liquidity and long-term profitability.

To mitigate thes challenges, the researchers recommend that insurance companies proactively analyze relevant risks and develop appropriate response strategies to address rapid policy changes and increasing uncertainty caused by tariff disputes.

The report also suggests a need to reorganize acquisition criteria and rate systems based on continuous monitoring of industries heavily impacted by tariffs and high-export companies. “I suggested.”

the researchers caution that “it is expected to be difficult in terms of liquidity management due to the increase in the cost of hedging in the process of renewal of foreign exchange derivatives, so it is necessary to review the current hedging strategy.”