By Telis Demos

Auto insurers are arguably one group of companies that didn't get a tariff reprieve on Wednesday since import levies are still on track for autos and, soon, auto parts. That could drive up claims costs.

However, they did get some favorable data in the latest consumer price index report. Motor vehicle costs rose just 6.4% year-over-year in March, a significant slowdown from February's 7.9% pace.

Shares of insurers were outperforming on Thursday as the broader market pulled back a large chunk of Wednesday's surge. S&P 500 property-and-casualty insurers were faring better as a group while Allstate and Progressive were also holding their own.

Already, insurers have been profiting from higher rates set against slowing cost inflation. If tariffs take time to start to increase prices, or if the market expects them eventually to be curtailed, the next few quarters might continue that trend.

Insurers are also viewed as a defensive play in a recession by some analysts and investors. Morgan Stanley analysts on Thursday noted that property-and-casualty insurers on average outperformed the S&P 500 by almost six percentage points over the past seven recessions.

In addition, they noted that tariffs may support pricing if losses start to rise. "We believe that [the] P&C sector is defensively positioned," they wrote.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

April 10, 2025 12:26 ET (16:26 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.