Recent US tariff changes are not expected to significantly impact the UK insurance sector, particularly in relation to motor and property repair costs. A detailed analysis of tariff-related developments reveals that while certain input costs remain under scrutiny, the broader inflationary trajectory for insurers remains stable, with minimal disruption anticipated across supply chains and pricing structures.

Last update as of 12 May: 

The US and China have agreed to a 90-day tariff reduction, which may have the opposite effect on certain globally traded commodities and, in turn, a contrasting impact on insurers.

Motor InsuranceRepairs: Stability Amidst Tariff Shifts

Labour, paint, and parts — the three principal components of motor repair costs — are largely unaffected by the latest tariff announcements. Labour, which comprises approximately 40% of repair expenses, continues to experience upward cost pressure, primarily due to ongoing skills shortages rather than any tariff-related factors.

Paint, representing around 25% of costs, continues to face persistent inflation. However, this is driven by underlying market dynamics and energy-related input costs, rather than tariff adjustments. 

Parts, which account for roughly 35% of total motor repair expenses, appear to be well-contained. Falling input prices and reduced freight costs are mitigating the effects of minor currency depreciation, thus keeping parts inflation in check. Furthermore, early primary research has not identified any significant disruption in parts availability or lead times.

Breakdown of Motor Repair Cost Drivers

Property InsuranceRepairs: Modest Inflationary Easing

In the property repair segment, the recent tariff landscape suggests a modest reduction in materials cost inflation. Key materials such as structural steel, concrete, and certain plastic fixtures have seen price softening, contributing to a more favourable outlook for insurers, particularly in large reinstatement scenarios such as fire or building collapse claims.

Despite this, paint continues to stand out as an inflationary hotspot, with prices rising between 7% and 9%. This increase is largely attributed to energy-driven input costs. Timber, plastic, and metal fixtures used in internal repairs are experiencing gentle inflation of around 1–2%, a trend that warrants ongoing monitoring but is not yet a major concern.

Labour remains the dominant cost driver in property repairs, typically accounting for 55–65% of total repair costs. While unaffected by tariffs, labour costs continue to climb due to a persistent skills shortage and elevated demand linked to government infrastructure projects. 

Breakdown of Property Repair Cost Drivers

The overall impact of the UK’s latest tariff changes on insurance repair inflation appears minimal. With stable or falling input costs, controlled freight rates, and no significant supply chain issues, the insurance industry — particularly motor and property segments — is unlikely to experience any material inflationary disruption in the near term.

Insurers should, however, continue to monitor persistent paint cost inflation and labour market dynamics, as these remain key influencers of claims inflation independent of tariff policy.

Related reading

The finding that labour is the dominant cost driver in property repairs, accounting for well over half of total reinstatement costs, and rising independently of any tariff movement, raises a practical question that cost analysis alone cannot answer: how are those labour rates actually set, and what commercial levers are available to insurers seeking to manage them? Builder rate cards are central to that conversation. An overview of how builder rate cards work in the context of property claims, including the key pricing dynamics and risk areas for insurers, provides a useful operational counterpart to the macro cost analysis covered here.

How Procurato can help

Understanding the direction of travel for claims cost inflation is one thing; knowing where your own claims base sits relative to the wider market is another. Procurato’s Claims Benchmarking service gives insurers a data-driven view of how their motor and property repair costs compare against industry peers, across labour, materials and parts, enabling more informed conversations with supply chain partners and providing a clearer picture of where performance improvement is genuinely available. If benchmarking your claims cost position is something your team is considering, we would welcome an initial conversation.

Need Deeper Insights?

If you would like a more detailed breakdown of cost drivers and material-specific inflation trends across property insurance categories, or further analysis tailored to your portfolio:

SpendQube (our proprietary solution) offers bespoke inflation mapping and real-time analytics across motor and property insurance claims. We help insurers monitor category-level inflation risk and improve claims cost forecasting with actionable intelligence.