GlobalData revises down global MAT insurance industry growth forecast due to increased US tariffs
The global marine, aviation, and transit (MAT) insurance industry, which was forecasted to grow at a compound annual growth rate (CAGR) of 6.9% before the imposition of the reciprocal tariff from the US, is now expected to grow at a CAGR of 6.4% during 2025-29, in terms of written premiums, according to GlobalData, a leading data and analytics company.
On April 02, 2025, the US President announced "reciprocal" tariffs on imports. These tariffs include a base 10% plus additional tariffs ranging from 10% to 245%. Higher tariffs are typically imposed on specific products, but the blanket tariff rate of 10% on all countries will negatively impact the global economy. The countries that are mostly dependent on exports to the US will be severely impacted. However, there is a hold on this tariff for 90 days, except for China.
According to GlobalData’s Insurance Database, the US accounted for around 50% of the global MAT insurance premiums in 2024. As per the revised forecast, high reciprocal tariffs will reduce US MAT insurance premiums by 1.4% in 2025, whereas the premiums of global MAT insurance will be impacted by 0.7%. The US is the largest importer in the world, with Mexico, China, Canada, Germany, and Japan being the top 5 exporting countries in 2023, accounting for 53% of the total US imports.
GlobalData expects the CAGR of MAT insurance premiums during 2025-29 to reduce by 0.5pp in Mexico, 0.6pp in China, 0.5pp in Canada, 0.5pp in Germany, and 0.2pp in Japan.
Swarup Kumar Sahoo, Senior Insurance Analyst at GlobalData, comments: "The ‘Liberation Day’ tariff will disrupt the global MAT insurance as the premium growth will slow down in 2025 and subsequent years compared to the previous forecast. Although the global MAT business will experience a temporary surge during April-June 2025 due to the 90-day pause in the tariff, the growth will slow down once the tariff is in place. This will also impact the profitability of MAT insurers across the world."
The US has imposed a tariff in the range of 20% (Germany and Italy) to 245% (China) on the top 10 exporters, which contribute 69% of the total US imports, according to the Observatory of Economic Complexity (OEC). Marine cargo business of all the markets except Canada and Mexico will be impacted, whereas for Mexico and Canada, which account for 29% of the total US imports, the aviation cargo and transit insurance will be disrupted.
Sahoo adds: “The decline in MAT premiums growth rate will be due to both a decline in exports and the value of exported goods. In case the exporter absorbs the cost of the tariff, the cost of goods will go down, and this will reduce the sum insured and the respective premium amount. On the other hand, if the importer bears this, it will be passed on to the consumer, leading to a decline in demand.”
To offset higher tariffs, importers have started either consolidating shipments or increasing the order size. The risk of theft and damage has increased due to the concentration of high-value goods at various points. Furthermore, the imposition of revised tariffs across countries will create complexities in customs clearance, leading to an increase in demurrage and detention fees.
Insurers are expected to incur additional costs to rewrite such policies by considering the complexities and associated additional risks. Additionally, increased claims in marine cargo, aviation cargo, and transit will impact the profitability of insurers.
Starting May 02, 2025, the US will eliminate the exemption of import tariffs on goods under $800 from China and Hong Kong. Due to this, DHL has suspended high-value business-to-consumer shipments to the US. Also, various airlines have suspended air cargo services for high-value goods. This will directly impact the air cargo insurance business.
Sahoo concludes: "The imposition of the higher tariff will disrupt the global MAT insurance, impacting premiums growth, while increasing the associated risks. Insurers need to be vigilant as higher claims would erode profitability. Furthermore, MAT insurers in the US will lose their global market share as they write half of the global MAT business."
