The return of inflationary pressure linked to geopolitical tension and US policy, widely dubbed “Trumpflation”, is sharpening concerns across the UK insurance market.
Much of the debate has focused on pricing and capacity. However, some commercial insurers are increasingly focused on a different pressure point: how economic strain on clients may affect claims patterns.
Fuel costs remain a key inflation driver in the UK, with energy and transport continuing to contribute to broader price pressures across the economy.
Market volatility has started to push up energy and transport costs, with geopolitical tensions affecting key shipping routes and contributing to renewed inflationary pressure across global supply chains. For UK businesses, that is feeding directly into operating costs and, in turn, insurance exposure.
For Phil Cunningham, CEO of Direct Commercial Limited, the most immediate transmission mechanism is not abstract macroeconomics but a far more tangible cost.
“The biggest issue that we could possibly see is fuel prices,” he said.
Fuel costs have moved back into focus as geopolitical tensions disrupt global energy markets and supply chains, feeding through to transport, logistics and operating expenses for UK businesses. For insurers with exposure to commercial motor and fleet risks, that creates a direct line between global events and day-to-day risk on the road, potentially changing how vehicles are used.
“Like many times in the past, vehicles may stay on, but some may get on the road less, which can be a positive in terms of claims frequency, for example,” he said.
Reduced mileage has historically been associated with fewer accidents, particularly during periods of economic slowdown.
However, any reduction in frequency may be offset by more complex behavioural risks as financial pressure builds and businesses come under strain.
“At the other end, from the exposure side, we've seen when anything like this has happened before: if the client's business is not going so well, you may experience an uplift in vehicles going missing or in fire, or more fraud,” he said.
Such patterns are not new. Periods of economic stress have historically been linked to increases in opportunistic fraud, arson and exaggerated claims, placing pressure on insurers’ loss ratios rather than headline pricing.
Operational capability may become as important as underwriting discipline. “If your claims teams are good and strong, you can manage that and spot it,” he said.
While inflationary narratives often focus on premium adequacy, the more immediate impact may be felt within claims.
“We would see it more from the claims perspective, following the pressures that it's putting onto our policyholders,” Cunningham said. The implication is clear: pressure is building first in claims, not pricing.
If cost pressures driven by fuel, supply chains or broader economic disruption continue to build, insurers may find that the first signs of strain appear not in rating models but in claims volumes, severity and fraud detection.
The challenge is less about reacting to inflation in isolation and more about understanding how it reshapes client behaviour and, in turn, the risks insurers face.
