By Chris Munro

April 25 - (The Insurer) - The impact of tariffs on loss costs for Selective Insurance Group will be “manageable” and is likely to be “in the low single digits on an overall basis”, its CEO John Marchioni said.

Marchioni said during a first-quarter earnings call with analysts on Thursday that understanding where U.S. President Donald Trump's tariffs ended up was "very much an open question".

“Overall, when you factor in the various mitigants, it is a manageable impact from a loss cost perspective,” he said, adding that the primary impacts of the tariffs will be auto physical damage lines, both personal and commercial, and also homeowners' property.

Marchioni compared the ratio of loss cost from labour against materials in auto and in property: historically around 60% came from labour in the auto business, while on the property side "both commercial and personal blended labors are in the neighborhood of 55% or so of the cost".

“So that's an impact that sort of mitigates the impact of tariffs,” he added.

Another consideration is imported materials, versus those produced and sourced within the U.S.

For auto parts, Marchioni said as much as 40% are produced and sourced domestically. For lumber, which Marchioni said is a big factor for both commercial and personal property loss costs, more than half is produced and sourced in the United States, lowering the impact of tariffs.

Marchioni estimated that personal auto physical damage might be the line of business that will be most impacted by the tariffs, but given Selective’s portfolio, it will only have a small impact.