Uptick in Auto Insurance Shopping Follows Uneven Activity for Most of 2020
March 09 2021 - 8:00AM
The percentage of consumers shopping for personal auto insurance
increased at the end of 2020 following large fluctuations – both on
an increasing and decreasing basis – observed after the onset of
the COVID-19 pandemic. New research from TransUnion’s (NYSE: TRU)
Insurance Shopping Snapshot Report reveals the rate of personal
auto insurance shopping in 2020 rose 6.2% on a year-over-year (YoY)
basis during the month of December.
The YoY shopping uptick observed in the weeks following
Thanksgiving likely reflects strong stock market performance,
improving consumer confidence, promising vaccine advancements and
an increase in new car sales.1
“While insurance shopping remained below 2019 levels throughout
much of the second half of 2020, rates began to rise once again YoY
in the last few weeks of the year – a promising trend heading into
2021,” said Mark McElroy, executive vice president and head of
TransUnion’s insurance business. “Various factors such as the next
round of economic stimulus payments, vaccine distribution and
leading financial indicators will be important considerations as we
continue to watch insurance shopping in the months ahead.”
Insurance shopping levels varied in the second half of the year
as a result of the pandemic. Rates spiked to +12.6% YoY for the
week ending July 5, building on the increases reported in June
20202 and coinciding with an uptick in used vehicle sales.3 These
trends quickly cooled off toward the end of July and August,
followed by a spike then dip in early September resulting from
blunted renewal shopping activity tied to a pandemic-shortened
March busy season.
Subsequent levels remained below 2019 shopping rates through the
end of October. Notably, shopping dropped even further in early
November to -9.7% for the week ending November 8, as insurance
advertising took a back seat to election cycle ad spend.
Second Half of 2020: Largest Weekly
Year-over-Year Changes in Auto Insurance Shopping
|
Week Of (2020) |
YoY % Shopping Change 2020 vs. 2019 |
Four Largest YoY Shopping
Increases(Q3-Q4) |
Jun. 29-Jul. 5 |
+12.6% |
Aug. 31-Sept. 6 |
+8.4% |
Nov. 30-Dec. 6 |
+6.6% |
Dec. 7-13 |
+6.2% |
Four Largest YoY Shopping Decreases (Q3-Q4) |
Jul. 27-Aug. 2 |
-3.3% |
Sept. 7-13 |
-14.2% |
Oct. 26-Nov. 1 |
-8.1% |
Nov. 2-8 |
-9.7% |
“We’ll likely see the economic challenges of 2020 continue to
impact drivers well into 2021, especially among the higher-risk
groups that also have a higher concentration of younger drivers,”
said David Drotos, vice president of insurance solutions at
TransUnion. “As a result of the exacerbated financial impact of the
pandemic, the industry will likely observe higher amounts of
customers electing to go without insurance altogether or shopping
for lower-cost insurance.”
Insurance shopping for higher-risk consumers decreased,
impacted by COVID-19 financial hardship
Financial hardship resulting from COVID-19 challenges4 continues
to significantly impact businesses and consumers nationwide and
were also reflected in 2020 insurance shopping rates, particularly
when looking at consumer risk. As observed for much of the first
half of 2020,2 YoY rates of higher-risk auto insurance shoppers
trended significantly below 2019 levels from July to December 2020,
further underscoring that economic recovery continues to be a
challenge for this group.
Rates for lower-risk auto insurance shoppers remained
flat-to-slightly elevated during the same July-December 2020 time
period, compared to 2019.
“COVID-19’s headwinds remain very real for American businesses
and consumers, and we will continue tracking insurance shopping
trends throughout 2021 in an effort to equip the industry with
insights that can help enable trust with customers,” concluded
Drotos.
TransUnion’s Insurance Shopping Snapshot Report will be shared
on a quarterly basis to highlight changes to insurance shopping
across market segments and geographies to provide insights that can
help inform carriers’ acquisition and retention efforts. For
additional insights into auto insurance shopping trends by region,
customer risk and generation, the full report can be accessed
here.
1 2020 Market Performance. Morningstar. January 5, 2021.
https://www.morningstar.com/articles/1016670/2020-market-performance-in-7-charts
1 Global Consumer Confidence Survey. The Conference Board. January
12, 2021. https://conference-board.org/data/bcicountry.cfm?cid=15 1
COVID-19 Vaccine Distribution: The Process. U.S. Department of
Health & Human Services.
https://www.hhs.gov/coronavirus/covid-19-vaccines/distribution/index.html
1 January 2021 NADA Market Beat. NADA.
https://www.nada.org/WorkArea/DownloadAsset.aspx?id=21474862658 2
June 2020 Insurance Shopping Snapshot Report. TransUnion. June 12,
2020.
https://content.transunion.com/v/ins-shopping-june-snapshot-report.
3 Retail Sales: Used Car Dealers. Economic Research, Federal
Reserve Bank of St. Louis.
https://fred.stlouisfed.org/series/MRTSSM44112USN. 4 Consumer
Financial Hardship Study. TransUnion.
https://www.transunion.com/financial-hardship-study.
About TransUnion’s Insurance Shopping Snapshot
Report
The quarterly Insurance Shopping Snapshot Report is based
entirely on TransUnion’s internal studies. The auto insurance
shopping trends reported are based on TransUnion’s report which is
derived from TransUnion’s extensive database of credit data. It
includes information on more than 500 million auto insurance
shopping transactions from January 2016 to December 2020. The
report focuses on the credit population, highlighting TransUnion’s
data. It also explores a subset of the total insurance shopping
population. The report excludes data from auto insurance customers
in California, Hawaii and Massachusetts, where credit-based
insurance scoring information is not used for auto insurance rating
or underwriting.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that
makes trust possible in the modern economy. We do this by providing
a comprehensive picture of each person so they can be reliably and
safely represented in the marketplace. As a result, businesses and
consumers can transact with confidence and achieve great things. We
call this Information for Good.®
A leading presence in more than 30 countries across five
continents, TransUnion provides solutions that help create economic
opportunity, great experiences and personal empowerment for
hundreds of millions of people.
http://www.transunion.com/business
Contact |
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david.blumberg@transunion.com |
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