Allianz Survey: 54% of U.S. Companies Plan Price Hikes Due to Tariffs, Driving Up Insurance Costs

On May 20, 2025, Allianz Trade released its Global Survey, revealing that 54% of U.S. companies plan to increase prices to offset the costs of new tariffs introduced by the Trump administration on April 2, dubbed “Liberation Day.” This marks a rise from 46% of firms planning price hikes before the tariff announcement. The survey, conducted across 4,500 companies in nine countries—including the U.S., China, and Germany—highlights the ripple effects of these tariffs, with significant implications for insurance costs, particularly in the auto sector.

The tariffs, including a 10% baseline on most imports (excluding Canada and Mexico) and a 25% rate on car imports, have driven up costs for goods like auto parts, building materials, and electronics. This has led to higher repair and replacement costs, pushing insurance companies to raise premiums to maintain profitability. For example, AutoInsurance.org reports a projected 9% increase in auto insurance rates in 2025, with states like Minnesota (16%) and Rhode Island (15%) facing steeper hikes due to tariff-induced parts shortages. SUVs are expected to see the highest impact, with rates rising up to 19%.

The survey indicates that only 22% of companies globally plan to absorb tariff costs, with U.S. firms particularly inclined to pass expenses to consumers. Strategies to mitigate tariff impacts include rerouting shipments (62% of U.S. firms), sourcing from lower-tariff countries like Southeast Asia or Latin America, and frontloading imports, with 86% of U.S. companies accelerating shipments before tariff deadlines. Additionally, firms are shifting logistics costs to suppliers, with a growing preference for “Delivered Duty Paid” terms globally, though U.S. companies favor “Cost, Insurance & Freight.”

The tariff-driven price hikes are exacerbating economic pressures, with Allianz economists forecasting a 5% unemployment rate by early 2026 and global export losses of $305 billion in 2025. Social media sentiment on X reflects consumer frustration, with posts noting that the price increases will hit everyday goods like car seats and groceries, as companies like Walmart warn of unavoidable cost pass-throughs.

Insurance industry challenges are compounded by supply chain disruptions and higher claims costs. Allen Insurance and Financial notes that insurers face increased payouts for repairs, particularly in auto and property lines, leading to upward pressure on premiums. During economic uncertainty, some policyholders may reduce coverage or opt for higher deductibles, further straining insurers’ premium income.

The Allianz survey underscores a broader trade war impact, with 60% of firms expecting negative consequences and 42% anticipating export turnover declines of 2–10%. While a 90-day tariff pause with China offers temporary relief, the ongoing decoupling of U.S. China trade evidenced by only 10% of U.S. firms planning to export to China (down from 20%)—signals persistent challenges. As companies adapt through reshoring (90% of U.S. firms plan to bring production home) or diversifying supply chains, insurance costs are likely to remain elevated, affecting consumers nationwide.