Tag Archives: #economy

Careers and Employment, Insurance Industry

Chart of the Week, “U.S. GDP and Insurance Growth Bolstered by Hispanic and Latino Community.”

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Chart of the Week (COTW), "U.S. GDP and Insurance Industry Growth Bolstered by Hispanic and Latino Community

Even as Latinos continue to play an essential role in the U.S. economy, Latino representation of insurance industry workers fell slightly in 2024, to 14.9 percent, from 15.3 percent in 2023, according to a recent Triple-I “Chart of the Week”. The highest representation of this demographic was 18.3 percent of insurance sales agents, with claims and policy processing clerks following closely, at 17.7 percent. The lowest representation was among underwriters, at 8.8 percent.

The chart — “U.S. GDP and Insurance Industry Growth Bolstered by Hispanic and Latino Community.”  — is based on data from the Bureau of Labor Statistics and the U.S. Latino GDP report.

From 2019 to 2023, Latinos drove 30.6 percent of U.S. GDP growth despite making up only about 20 percent of the overall U.S. population (by 2024) and 19.4 percent of the workforce. Latinos generate a GDP of $4.1 trillion by 2023 (up from $3.7 trillion in 2022), sufficient to rank alone as the fifth-largest GDP in the world. The Latino consumer market, with $2.7 trillion in consumption in 2023, has a buying power larger than the economies of powerhouse states such as Texas ($2.58 trillion) and New York ($2.17 trillion).

The National Association of Hispanic Real Estate Professionals predicts that Latinos will be the largest group of homebuyers in the country by 2030. Homeownership for this group is 9.8 million households, with 238,000 new Latino owner households added in 2023 alone —the largest increase of any racial or ethnic group for the second consecutive year. Data analysis indicates there may be more than 30 million new Latino drivers hitting the roads through 2050. Latinos are also the fastest-growing group of entrepreneurs, according to the Stanford Latino Entrepreneurship Initiative.

Effectively engaging this formidable market creates immense opportunity for the insurance industry. However, only just over half of the respondents to a survey conducted by Marsh and the Latin American Association of Insurance Agencies (LAAIA) said they believed their companies were invested in attracting Hispanic customers. Nearly two-thirds of respondents said insurers do not employ enough Latinos. Only 14 percent thought insurers employed an adequate number. Moreover, 84 percent agreed that Latinos are underrepresented in the senior management of most insurance companies.

Efforts to create a diverse and inclusive workforce can drive greater client satisfaction and loyalty.  As Amy Cole-Smith, Executive Director for BIIC/ Director of Diversity at The Institutes, has pointed out, “this isn’t just about equity —it’s about unlocking growth and staying competitive in a changing market. When the insurance workforce reflects the diversity of the market, we’re in a stronger position to build products that meet people where they are.”

Auto Insurance, Business Insurance, Insurance Industry, Insurers and the Economy

Tariff Uncertainty May Strain Insurance Markets, Challenge Affordability

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Chief Economist and Data Scientist, Dr. Michel Léonard

Recent tariffs issued by U.S. President Donald Trump are on track to increase the price of parts and materials used in repairing and restoring property after an insurable event. Analysts and economists, predict these price hikes will lead to higher claim payouts for P&C insurers and, ultimately, higher premiums for policyholders. 

After making several announcements since early March 2025, on April 2, President Trump signed an executive order imposing a minimum 10 percent tariff on all U.S. imports, with higher levies on imports from 57 specific trading partners. A general tariff rate became effective on April 5, while tariffs on imports from the targeted nations, ranging from 11 to 50 percent, took effect on April 9. A 25 percent tariff applies to all steel and aluminum imports and cars. President Trump says he might consider a one-month exemption to the auto industry, but as of this writing, no changes have been issued. 

Generally, tariffs can bring in revenue for the issuing government but lower the operating margin for impacted domestic businesses. Inventory and supply chain managers may attempt to stockpile in advance of the new rates becoming effective, which in turn can spike demand and quickly spike prices for sought-after items. Eventually, these cost hikes get passed on to consumers.  

Nonetheless, to ride out the situation, inventory and supply chain managers need a fundamental level of predictability regarding what the levies will cover, what the rates are, and when these rates go into effect. The timing and scope of President Trump’s tariff policies have been challenging to nail down, including for many goods particularly relevant to construction and auto manufacturing. For example, his initially declared rates for major trading partners – Canada, Mexico, the European Union, and China – have fluctuated as these nations announced reciprocal tariffs, and those levies, in turn, were met with higher US rates. 

Then, on April 9, President Trump declared a 90-day pause on tariffs. This change was actually not a true pause but a reduction of previous rates for several countries to 10 percent, except for China. The White House has declared on April 10 that the previously announced 125 percent rate against goods from China is actually now 145 percent. 

According to S&P, the levy on auto industry imports has been comparatively less dynamic as, despite confusing announcements from the White House, there has been no change to President Trump’s 25 percent rate declared on March 26, “which applies to all light-vehicle imports, regardless of country. The 25 percent tariff includes auto parts as well as completely built up (CBU) vehicles. The CBU autos tariff went into effect on April 3, 2025, while the auto parts portion is due to come into effect on May 3, 2025.” 

As insurers grapple with risk management and inflationary pressures, other challenges posed by the tariffs can include issues for policyholders, specifically coverage affordability and availability. One downstream side effect may be the increased risk of expanding the protection gap – uninsurance and underinsurance (UM/UIM) due to higher premiums and higher valuations that can come into play when materials costs rise. Across the fifty states and the District of Columbia, one in three drivers (33.4 percent) were either uninsured or underinsured in 2023, according to a recent report, Uninsured and Underinsured Motorists: 2017–2023, by the Insurance Research Council (IRC), affiliated with The Institutes. 

Our Chief Economist and Data Scientist, Dr. Michel Léonard, shares his analysis of how the tariffs may impact the P&C Insurance industry.  

“There’s no crystal ball”, say Dr. Léonard, “but prudent risk underwriting and risk management suggests the use of scenarios and increased price ranges for different tariff levels, the more precise impact of which can be updated based on actual price increases for individual prices.”  

Dr. Léonard outlines three types of P&C replacement cost scenarios given different tariff ranges: 

1) For single-digit tariffs, while inventories last, higher prices below that tariff’s rate;  

2) for single-digit tariffs on goods still economically viable post-tariffs, higher prices up to the tariff’s rate; and  

3) for single and double-digit tariffs on goods no longer economically viable, a multiple of the pre-tariff price for tariff-evading goods.  

His presentation, Tariffs and Insurance: Economic Insights can be previewed, but the full version is currently available exclusively to Triple-I members.  

Triple-I remains committed to keeping abreast of these and other developments crucial to the insurance industry’s future. For more information, we invite you to stay tuned to our blog and join us at JIF 2025.