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The Specie lining: Revisiting the value of precious metals in purchasing or renewing insurance

Explore the impact of rising precious metal prices on insurance coverage. Reassess your asset values and ensure adequate protection with expert insights.

16/04/2025 · 3 minute read

The commodity market frequently experiences moments of high volatility. Heightened geopolitical risk, persistent inflation concerns, and general macroeconomic uncertainty have helped fuel a bull market run in the precious metals sector, with gold and silver recently reaching prices over US$3,000 per ounce and US$31 per ounce, respectively.

Price increases, coupled with a cautionary market backdrop, have led to a surge in demand for both gold and silver, as well as other commodities. Previously, we looked at how specie coverage can help protect these high-value assets. However, given current market dynamics, many organizations also may need to reassess their coverage limits.

How tariffs influence metal commodity prices

While gold has not been a direct target of recent tariffs at present, many use gold as a hedge and that has significantly impacted the  price, which is expected to rise by an additional 8% by the end of 2025. This situation illustrates how even indirect trade policy concerns can send ripples through global financial markets.

In contrast, other essential metals have been directly impacted by tariffs. In response to the US tariffs, China has imposed export controls on tungsten, tellurium, molybdenum, and ruthenium — essential metals for technologies, clean energy, and national security. China controls approximately 80% of the world’s tungsten supply, and tariffs on tungsten could raise global production costs and prices.

Reassessing coverage limits

Rising commodity prices pose financial risks — including the risk that an insurance policy may not cover the full amount of loss, known as underinsurance — for companies across all industries. As asset values increase, previously declared values may not keep pace, resulting in a potential shortfall in recovery in the event of a claim. It is the insured’s responsibility to declare the value of assets insured. Overestimating the value can lead to unnecessary premium costs, while underestimating the value may mean that the insured is not made whole in the event of a claim. Moreover, assets that were valued appropriately at the policy’s inception could become underinsured due to steep commodity price increases.

For example, gold prices have risen approximately 58% since 2023 based on the above prices. A mining company, refiner, or commodity trader with 100,000oz of gold exposure in 2023 would see the value increase from US$190 million to US$300 million, resulting in a US$110 million differential.

Meanwhile, since the start of 2023, the price of silver has soared by nearly 60% in US dollars — more than any of the world’s leading share indices. These examples illustrate the need for organizations to revisit their declared values and insurance policy limits. 

Revisiting your declared values

If your business is concerned about the financial values associated with your commodity assets, consider the following steps:

  • Review your insurance policies. See that they reflect an up-to-date valuation of your assets and review your covered risks to think through potential loss scenarios.
  • Conduct a risk assessment. Identify potential risks and liabilities specific to your industry and operations in the current environment.
  • Seek professional advice. Consult an insurance broker to review your insurance needs. They can provide insights into industry-specific risks and approaches to covering various asset types.
  • Conduct an inventory of your assets. This may include equipment, stock, and other valuable items to inform how much cover you wish to purchase.

In our experience, valuing assets for insurance purposes benefits from a deep understanding of the factors affecting your organization’s needs. Partnering with an insurance broker with specific industry knowledge and expertise will assist with your efforts to maintain your desired level of coverage. 

Marsh’s Specie team is the largest in the sector , bringing extensive experience in designing and placing policies for our clients. Our offerings include insurance facilities that are capable of providing up to US$1.5 billion of capacity for any one risk with the agreement of only two insurers, with access to a total of US$3.5 billion of capacity throughout the specie market. Greater limits of insurance can be attractive to those desiring greater peace of mind during this uncertain period.

Our people

Patrick McCahon

Patrick McCahon

Growth Leader, FINPRO Specie

  • United Kingdom

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Hannah Fatt

Vice President, Bowring Marsh

  • United Kingdom

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