Billy Duberstein, The Motley Fool

Mon, Jun 9, 2025, 1:19 PM3 min read

• Insurance stocks were broadly under pressure on Monday.

• Recent data pointed to some modest declines in pricing for property insurance nationwide.

• In addition, the unrest in Los Angeles may have auto and property insurers further under pressure.

• 10 stocks we like better than Progressive ›

Shares of auto insurance leader Progressive (NYSE: PGR) fell today, down by as much as 4.7% at its lows, before recovering to a 2.9% decline on the day.

There wasn't any company-specific news today, but there were two news items driving insurance stocks down broadly. First, rival management teams have recently pointed to a softening in property insurance pricing, and that was backed up by a note today from a Wall Street sell-side analyst.

In addition, the unrest in Los Angeles may cause damage to both property and autos in the area, and Progressive has a significant presence in Southern California, as one of the largest national auto insurers.

The past few years have seen massive increases in property insurance, due to a combination of climate change-oriented disasters; "social" inflation, meaning lawyers becoming overly litigious toward insurance companies; as well as actual inflation.

However, recent data points to a slowdown or even declines in property pricing, with insurance brokers Ryan Specialty and Arthur Gallagher saying last week that they have seen softness in U.S. property pricing. That was echoed today by Truist analyst Mark Hughes, who wrote a downbeat note on the sector. In it, he said excess and surplus property insurance pricing had softened, with the large Florida market seeing mid-single-digit premium price declines and Texas seeing high-single-digit declines in recent months.

In addition to lower pricing, it's possible the immigration-related unrest in Los Angeles may be causing some of the sell-off in the sector today. While Gov. Gavin Newsom has said the protests were largely peaceful and violent outbursts relatively small and contained, President Donald Trump did deploy national guard troops to the area.

However severe the violence, there is likely some damage done to property and cars in the downtown L.A. area. Since Progressive is the second-largest car insurer in the country, investors may believe there could be excess damage as a result.

It should be noted that while property insurance was the topic of the sell-side note today and this week, only about 10% of Progressive's exposure is to property. Progressive's largest exposure, at over 70% of premium revenue, is still in auto insurance.