Shares of insurers Allstate and Progressive could be hurt by more-expensive policies if the United Auto Workers strike against the Detroit-Three automakers.
Auto insurance is set to get more expensive if the United Auto Workers simultaneously strike against the Detroit-Three automakers. That isn’t great news for auto-insurance stocks.
Americans were buying cars at a rate of about 17 million units a year before the pandemic. Now that’s about 15 million units a year. There just aren’t enough cars around to buy. “U.S. light-vehicle dealer inventory ended July at 1.79 million units,” wrote Benchmark analyst Mike Ward in a recent report. “The highest levels since April 2021.” Still, that’s about 1 million units below typical levels.
Insurance price increases have just started to catch up and now the UAW could strike against all three automakers with roots in Detroit, General Motors , Ford Motor , and Chrysler parent Stellantis , if a new labor deal isn’t reached by midnight on Sept. 14.insurers,” wrote J.P. Morgan analyst Jimmy Bhullar in a Thursday report. “A strike would disrupt supply chains, cut new vehicle production, and drive an uptick in used car values.
Strike fears have hit the automaker stocks. GM, Ford, and Stellantis shares are down about 8% on average over the past month, while the S&P 500 has only slipped about 1%. Insurance stocks don’t appear to have been impacted. Allstate stock is down about 3% but Progressive shares are up about 6% over the past month.
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