June 2026 Auto Insurance CPI Data: Small Incremental Inflationary Pressure

Research evidence excerpt

June 2026 Auto Insurance CPI Data: Small Incremental Inflationary Pressure

Update

July 14, 2026 02:57 PM GMT

Morgan Stanley & Co. LLCMInsurance - Property & Casualty | North America Bob Jian Huang

Equity Analyst

June 2026 Auto Insurance CPI Bob.Huang@morganstanley.comDaniel Lee, ACAS +1 212 761-6136

Research Associate

Daniel.Lee4@morganstanley.com +1 212 761-0219

Data: Small Incremental Siddhant Shah

Sid.Shah@morganstanley.com +1 212 761-2603

Inflationary Pressure

Insurance - Property & Casualty

North America

Industry View Attractive

Vehicle repair costs and used car prices ticked upward. Major input drivers for

auto insurance losses saw mixed results YoY vs. the prior month ( Exhibit 1 ). Slower

CPI trends should ease prior concerns about inflation hitting the auto insurance

sector while pricing deteriorates. While 2025 inflation was elevated, major

components such as used car prices ticked up to -1.8% YoY vs. -2.0% last month.

Vehicle repair costs, one of the key headwinds to auto losses from 2022 to 2025,

rose YoY (+6.0% vs. +4.4% last month). YoY CPI for vehicle parts decelerated

slightly to +1.7% vs. +2.6% in the prior month, and medical care CPI YoY also

decelerated to +2.0% (vs. +2.6% last month).

Where do auto underwriting margins go from here? As auto parts, repair costs,

and used car prices face incremental pressure, go-forward auto loss severity will be

the key focus for auto insurers. That said, inflation pressure takes time to show up in

earnings, and given that a large portion of the impact relates to attorney

representation, we expect broader inflationary pressure to be manageable for now.

Exhibit 1: Auto severity related CPI component YoY generally stable

Auto Severity YoY Trends - CPI Components

50%

40%

30%

%

Change 20%

YoY 10%

0%

-10%

-20%