The news: After US President-elect Donald Trump returns to the White House in January 2025, property and casualty (P&C) insurers can expect some big challenges—and a few opportunities.

The risks: Some of Trump’s promises would mean even higher costs for insurers.

• Auto insurers are already facing rising costs, but Trump’s promise to impose heavy tariffs on imported goods would raise the price of automobiles and parts for US-made vehicles, per Business Insurance.
• This would increase the cost of auto insurance claims, pushing insurers to keep raising premiums for already maxed-out consumers—some of whom have chosen to forego insurance altogether.

Cumulative losses are also rising due to smaller but more frequent weather events, which have bankrupted some smaller P&C insurers and forced others to leave certain markets completely. Trump’s plans to ramp up fossil fuel production, repeal tax incentives for green vehicles, and step back from global climate agreements mean the US won’t prioritize addressing the industry’s climate-change-related challenges.

The opportunities: Here’s how insurers can react to those changes.

• Parametric insurance can help P&C insurers respond more efficiently to climate change risks by providing automatic payouts triggered by specific events, like hurricanes above a certain strength. 
• And technology like drones can also help P&C insurers improve the accuracy of risk assessments, mitigate fraud, enhance worker safety, and speed up claims processes.

Using data-driven models and emerging AI/IoT technology can reduce administrative costs, speed up payouts, and improve risk modeling, allowing insurers to cover high-risk areas profitably while enhancing customer satisfaction.

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