Tuesday, May 12, 2026

By Kimi • May 12, 2026 • 16 min read

The Daily Insider

Last 24 Hours

S&P 500 Notches Fresh All-Time High Above 7,412; Dow Stalls at 49,704 Ahead of CPI. The S&P 500 climbed to a fresh record close of 7,412.84 on Monday while the Dow edged up to 49,704, still shy of the 50,000 milestone everyone is watching. Nasdaq posted a new record of its own. Futures ticked higher Tuesday morning as Wall Street braced for the April CPI print, which will test whether tariff refunds and trade-deal optimism are feeding inflation pressure. If you have clients refreshing their brokerage apps waiting for the Dow to cross 50K, they may have to wait at least one more session.

First IEEPA Tariff Refund ACH Payments Flowing This Week. The U.S. Customs and Border Protection's CAPE portal, launched April 20, had processed about 21% of eligible IEEPA tariff refund claims as of late April, with roughly 3% approved and the first electronic payments scheduled via ACH for this week. Importers who have not entered bank details in ACE's ACH Refund tab will see payments held until their accounts are updated. The government estimates more than $166 billion in refunds are owed, with valid claims to be resolved within 60 to 90 days of CAPE Declaration acceptance. If you have business-owner clients in manufacturing or retail, this is the week the checks start landing.

Trump Heads to Beijing May 14–15 With Musk, Cook, Fink, and Ortberg for Xi Summit. President Trump departs Wednesday for a two-day summit with Xi Jinping, bringing a marquee CEO delegation: Tesla's Elon Musk, Apple's Tim Cook, BlackRock's Larry Fink, and Boeing's Kelly Ortberg. A Washington Post analysis published Tuesday calls the meeting "dialed down" from peak trade-war tensions, but warns challenges lurk. No comprehensive deal is expected. Likely outcomes include a trade truce extension, a potential 500-Boeing-aircraft purchase agreement, and continued Chinese imports of U.S. agricultural goods. The market is pricing in optimism. Whether that holds depends on what comes out of the room.

Iran Ceasefire "On Massive Life Support" After Trump Calls Tehran's Counteroffer "Totally Unacceptable." President Trump rejected Iran's counterproposal to end the war Monday, calling it "totally unacceptable," while Tehran vowed to "never bow." The standoff has choked the Strait of Hormuz and roiled global energy markets for weeks. Iran offered to suspend, but not dismantle, uranium enrichment and proposed transferring some highly enriched uranium to a third country with a return clause. The U.S. demands a 20-year moratorium and full dismantlement. This matters directly to your book: Hormuz disruption keeps oil prices elevated and business interruption exposure high across every commercial line.

Trump Sets July 4 Deadline for EU Trade Deal, Threatens "Much Higher" Auto Tariffs. President Trump gave the European Union until Independence Day to ratify a trade framework or face tariffs beyond the 25% auto levy he announced May 1. He accused Brussels of failing to pass implementing legislation from a deal struck last July at his Scottish golf course. The EU, which had agreed to a 15% tariff ceiling on most goods in exchange for eliminating duties on U.S. industrial products, is now considering its rarely deployed "anti-coercion instrument," which allows responses ranging from counter-tariffs to excluding U.S. firms from European government tenders. The auto sector is already feeling the squeeze, and agents writing commercial auto or dealer inventory policies should prepare for harder conversations.

Heartbeat

The hard market is not winding down. It is printing money for carriers, and the Q1 earnings season is the proof.

Allstate posted a blowout first quarter: net income of $2.4 billion on $16.9 billion in revenue, a Property-Liability combined ratio of 82.0%, and adjusted EPS of $10.65, well above analyst expectations. Adjusted return on equity reached 44.4%. The insurer credited lower catastrophe losses and improved underwriting discipline. When a carrier is running an 82 combined ratio, that is not just profitability. That is a signal that rate increases still have room to stick, and that the underwriting posture is not loosening anytime soon. If you are in a client meeting this week explaining why their renewal went up again, the answer is that carriers are being rewarded handsomely for staying disciplined. That is not changing.

Progressive made the case even more emphatically. First-quarter net income hit $2.8 billion on $22.2 billion in revenue, with a companywide underwriting margin of 13.6%, more than triple its stated 4% calendar-year target. Progressive has become the pricing-discipline benchmark in personal and commercial auto, and these numbers explain why competitors keep following its lead on rate. Aflac quietly posted strong results too, with total revenues of $4.3 billion, up from $3.4 billion a year ago, and net earnings of $1.0 billion. The takeaway across the board: carriers are flush, and they intend to stay that way.

California keeps tightening. USAA has filed for a 7.3% homeowners insurance rate increase in the state, the latest in a string of filings as carriers rebuild margins after catastrophic wildfire losses. The FAIR Plan, the state's insurer of last resort, has proposed raising home rates by more than 35% starting this spring. Governor Newsom's Sustainable Insurance Strategy, which now allows forward-looking catastrophe models and reinsurance cost recovery in rate-setting, has helped some carriers recommit to California. But affordability concerns for policyholders in high-risk zones are intensifying. If you write California homeowners, you already know this. If you do not, watch closely, because what happens in California tends to migrate.

Regulators are watching the AI models, too. The NAIC's Big Data and Artificial Intelligence Working Group is running a multistate pilot of its AI Systems Evaluation Tool from January through September 2026, with a dozen states participating including Colorado, Maryland, Florida, California, and Virginia. The tool is designed to help regulators examine AI use in underwriting, claims, and operations, and it could become a nationwide examination standard. Carriers that have not built formal AI governance programs should treat this pilot as a preview of coming examination requirements. For agents, it means the carriers you represent will eventually need to explain how their AI models make decisions, and you will need to be conversant in that language.

The deal table is heating up again. Insurance brokerage M&A has surged past last year's transaction pace, with OPTIS Partners declaring in a late-April report that the Q1 2026 slowdown is "bottoming out." TWFG announced on May 5 the acquisition of Asset Protection Insurance Associates, combining APIA's MGA specialization with TWFG's national distribution platform. Analysts expect deal activity to accelerate through summer as valuation multiples stabilize and private equity dry powder comes back into the sector. If you are a mid-sized agency owner, your phone may start ringing. Know your number before you pick up.

What's Happening

Insurance

Commercial auto remains the hardest line in P&C. The industry combined ratio is forecast at 104.4 in 2026, according to a May 8 Carrier Management analysis, meaning carriers pay out $1.04 for every dollar of premium collected. Social inflation, nuclear verdicts, and rising claim severity are the primary culprits, and the outlook actually worsens: projections have the ratio climbing to 106.3 by 2029. This is not a cycle that is about to turn. Agents with commercial auto books need to set expectations clearly with clients. Double-digit rate increases and tightening underwriting standards are the new normal through at least mid-decade. If you are quoting a fleet account this week, lead with that reality. The conversation is easier when you frame it honestly than when the renewal lands as a surprise.

Fixed annuity rates jumped sharply this week. Top multi-year guaranteed annuity rates rose as much as 1.85 percentage points across terms. Atlantic Coast Life re-entered the market aggressively with a 7.65% 10-year rate, though agents should note it carries a lower credit rating. For A-rated carriers, 5-year MYGAs are running 5.5% to 6.3%, and fixed index annuity cap rates on longer terms hit 12%. This is a meaningful window. Agents should emphasize rate-lock advantages to clients who are still sitting in CDs or money markets waiting for "the right time." The right time is looking a lot like right now, particularly for clients in the 55-to-70 age range who want predictability and are tired of watching bond yields wobble.

Global insured catastrophe losses reached $107 billion in 2025, anchored by the estimated $40 billion California wildfire event, the largest single wildfire loss in U.S. history. Swiss Re projects 2026 insured losses could hit $148 billion, rising to $186 billion by 2030, with wildfire identified as the fastest-growing peril at roughly 12% annual growth. Catastrophe bond issuance is at record levels as carriers shift risk to capital markets. The Bermuda Risk Summit 2026 is spotlighting conflagration risk and long-term insurability questions ahead of peak wildfire season. For agents, the implication is straightforward: the reinsurance cost that drives your clients' premiums is not coming down. It is being restructured, and those costs will continue flowing through to the policyholder.

The AI liability coverage gap is finally getting carrier attention. Three new products launched in 2026. Munich Re's HSB introduced an AI liability product for small and mid-sized businesses in March, covering bodily injury and advertising injury claims arising from AI-generated content. Corgi Insurance launched a broader product in May protecting against algorithmic bias and autonomous decision errors, the risks most general liability policies now explicitly exclude. Lloyd's of London*-backed Testudo targets enterprise generative AI litigation risk including copyright infringement claims. If you have clients deploying AI tools in their operations, and by now most of them are, the question is no longer whether they need AI liability coverage. It is which product fits their exposure profile. This is a new line of business, and the agents who learn it first will own it.

Personal Finance & Economy

The average 30-year fixed mortgage rate edged back up to 6.33% on May 12 per Optimal Blue data cited by Fortune, reversing a brief dip to the 6.19% range seen last week. Zillow puts the rate between 6.25% and 6.43% depending on loan type and lender. Bond market pressure from the unresolved Iran conflict and pre-summit trade uncertainty continues to keep rates elevated despite the broader rate-cut narrative. Home buyers are getting only modest affordability relief, and anyone who was hoping the spring would bring a dramatic shift has been disappointed. The Fed's current hold at 3.5% to 3.75% gives the central bank room to cut this summer, but the bond market is not cooperating yet.

Most businesses plan to pocket their tariff refunds, not pass savings to consumers. A CNBC CFO Council survey of 25 executives found that while 12 planned to file for IEEPA tariff refunds, none intended to lower consumer prices in response. The picture is more nuanced on the ground: Costco's CEO told investors the company will return savings to shoppers through lower prices, and FedEx pledged to pass refunds back to the businesses it shipped goods on behalf of. Marketplace.org found a handful of smaller manufacturers voluntarily sharing refunds. But the CNBC data suggests the windfall will largely stay on corporate balance sheets. For your clients, this means the cost-of-goods relief they may have been expecting is probably not coming. The tariff refunds are real, but the trickle-down is not.

CD rates are holding at 4.20% APY, with the best nationally available rate from Newtek Bank on a 9-month term as of May 8, per Bankrate and NerdWallet. A+ Federal Credit Union is offering up to 5.00% on a 12-month CD in select markets. Rates have been on a slow slide in 2026 as banks price in anticipated Fed easing this summer despite the current hold. Financial advisors are increasingly recommending clients in the 55-to-70 age range lock in longer-term CDs now before yields compress further. For agents who also do financial planning, the conversation about where to park safe money is getting more urgent. The window for 4%-plus guaranteed returns is narrowing, and clients who wait may wish they had not.

April existing home sales barely moved. Up 0.2% to a seasonally adjusted annual rate of 4.02 million, essentially unchanged year-over-year, according to new National Association of Realtors data released Monday. Inventory improved to 1.47 million units, representing 4.4 months of supply, and the median price ticked up 0.9% to $417,700. A Fortune analysis calls the housing market "broken" and increasingly permanent, with mortgage rates at 6.3% keeping many would-be buyers on the sidelines despite the best inventory conditions since 2020. For agents writing homeowners, this is a market where policies are sticky. People are not moving, so they are not shopping. Retention is high, but new business from home purchases remains sluggish.

Building Your Business

Tariff refund season just opened a client conversation window that does not come around often. As the first IEEPA tariff refund payments hit business bank accounts this week, agents have a rare opening. Business-owner clients in manufacturing, retail, and import-heavy industries may be receiving material windfalls, potentially six figures, for the first time. Smart agents are already scheduling "refund review" calls to revisit business liability coverage, key-person insurance, and buy-sell agreements in light of new capital on the balance sheet. It mirrors the tax-refund-season playbook, but with larger check sizes and more complex supply-chain eligibility questions that position you as a knowledgeable advisor rather than just a policy seller. The playbook is simple: call your commercial clients this week, ask if they have filed their CAPE Declaration, and offer to review their coverage in light of the refund. Even if they have not filed yet, you just became the person who told them about it. That is worth more than a cold lead list.

The agents who fill their pipeline in May are the ones who win Q3. This is not a theory. IADBrokerage's "6-Month Rule" framework, used primarily for Medicare supplement and annuity producers, shows that leads generated now convert in 60 to 90 days. That means the outreach you do this week becomes July and August appointments, right when your competitors are coasting through summer barbecues and vacation mode. The principle applies across all lines. The highest-ROI tactics right now include annual review outreach to existing clients, community event sponsorships targeting small business owners navigating tariff uncertainty, and LinkedIn content addressing economic volatility. All of these pre-position you for Q3 close conversations. The summer slump is not something that happens to you. It is something you let happen by waiting until July to notice your pipeline is empty. Start now.

AI & Tech

Google I/O 2026 opens next Monday, May 19, in Mountain View, with the flagship keynote followed by a developer session on "agentic coding," AI tools that handle routine development tasks autonomously. Gemini 4, Google's next flagship model, is expected to be announced with faster response times, deeper reasoning, and tighter Google Cloud integration. For insurance agents and small business owners, the Vertex AI and Google Workspace AI sessions are the ones to watch. Prior I/O cycles have introduced the tools that later became standard in CRM and productivity platforms. If you use Google Workspace for your agency, the features announced next week will likely show up in your daily tools within six months. Pay attention to the Workspace announcements, not just the flashy demos.

AI-centered insurtechs captured 95% of Q1 2026's $1.63 billion in global funding, a record share per a Gallagher Re report. The median deal size hit $10 million, nearly double the 2021 venture-boom peak. The week of May 4 through 9 alone saw $820 million across four transactions, each targeting a different layer of insurance infrastructure: claims administration, carrier underwriting, software modernization, and catastrophe capital. This is not consumer-facing app money anymore. This is infrastructure money. The investors are betting that AI will reshape how insurance actually operates, from how risks are priced to how claims are settled, and they are putting serious capital behind that thesis. The implication for agents is that the carriers and MGAs you work with will be running on fundamentally different technology within the next two to three years.

Corgi Insurance closed a $160 million Series B at a $1.3 billion valuation on May 6, co-founded by Nico Laqua and Emily Yuan, formerly an OpenAI product manager. Corgi offers insurance products specifically for AI-related risks: algorithmic bias, autonomous decision errors, and AI-generated content liability, targeting businesses whose general liability policies now explicitly exclude these exposures. The raise is the largest single insurtech round of the May 4-to-9 week and reflects investor conviction that AI liability is the next major emerging-risk product category. This is a company to watch. If you are an agent trying to figure out where the next new line of business comes from, AI liability coverage is forming right now, and the companies building it are getting billion-dollar valuations.

A new generation of AI tools is delivering measurable ROI for insurance agencies right now. Early adopters are reporting 6 to 8x returns within the first 30 to 60 days. Skara AI qualifies inbound leads in real time before agents engage, surfacing the highest-intent prospects before a human picks up the phone. Foliume integrates with existing CRMs to automate follow-up workflows and flag cross-sell opportunities your team is missing. Zoho CRM provides a 360-degree client view across email, phone, chat, and social from a single dashboard. These are not experimental tools. They are production-ready, and agencies that have adopted them are closing faster and retaining better than agencies that have not. If you have been waiting to start an AI tool pilot, the data from early adopters is clear: the longer you wait, the further behind you fall. A full sales cycle behind your tech-enabled competitors is a gap that gets harder to close with every quarter.

Closing

The first tariff refund checks are hitting business bank accounts this week, and somewhere right now a business owner is staring at a deposit they did not expect. The agent who calls them first, who helps them think about what that capital means for their coverage and their risk profile, wins a conversation that every other agent will wish they had started. That is the thread worth pulling today. Now go build something.

Sources

* Regie Durana is a Licensed Financial Professional that may be appointed with or eligible for appointment through World Financial Group. Appointment and product availability may vary by state.

This content was generated with AI assistance and reviewed by Regie Durana.

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