Insurance: May CPI: Auto Insurance Pricing Rolls Over as Loss Costs Remain Sticky

Research evidence excerpt

Insurance: May CPI: Auto Insurance Pricing Rolls Over as Loss Costs Remain Sticky

Deutsche Bank

Research

North America Industry Date

Insurance Insurance 10 June 2026

May CPI: Auto Insurance Pricing Rolls Over as

Cave Montazeri Loss Costs Remain Sticky

Research Analyst

+1-212-250-2798

Auto Insurance CPI Turns Negative for the First Time This Cycle

Motor vehicle insurance prices declined 2.0% YoY in May, according to the

Consumer Price Index (CPI). This marks the first decline of this cycle following

five years of sustained rate increases. We expect pricing pressure to persist as

carriers shift toward growth and policymakers continue to push for improved

affordability. However, claims inflation remains sticky, suggesting auto insurers

could face margin pressure. See chart below.

Physical Damage Cost Inflation Accelerates to 2.8%

Physical damage cost inflation accelerated to +2.8% in May from +1.5% in the

prior month. Motor vehicle repair costs increased 4.4% (vs. +3.3% in prior month).

Motor vehicle body work inflation came in at 6.8% this month (vs. no data

provided for the past 3 months, and +4.0% reported back in January). Motor

vehicle parts and equipment inflation of 2.1% this month was a deceleration from

3.8% in the prior month. Used cars and trucks prices declined 2.0% in the quarter

(vs. a decline of 2.7% in the prior month). See the table below for details.

Bodily Injury Claims Inflation Decelerates to 4.9%

Bodily injury claims inflation decelerated to 4.9% in May, vs. 5.1% in the prior

month, with outpatient hospital services at +6.4% (vs. +6.6% in the prior month).

Physician services inflation increased to 2.9%, up from 2.6% in the prior month.

Inpatient hospital services inflation was 5.4% this month (vs. 6.2% in March and

no data provided in April).