Increases in Auto Insurance Shopping Spurred on by Millennials, Gen Z and Subprime Consumers
July 31 2019 - 6:00AM
The number of consumers shopping for personal auto insurance is on
the rise, driven largely by the youngest generations. The newly
released Auto Insurance Shopping Index from TransUnion (NYSE: TRU)
revealed that 21.7% of consumers were shopping for personal auto
insurance in 2018, up from 20% the previous year.
Millennial and Gen Z consumers played a large role in this
increase as they made up 39% of the consumers shopping for auto
insurance in 2018, up from 35% in 2017. Moreover, Millennial and
Gen Z consumer are shopping 44% more than consumers of other
ages.
Auto Insurance Shopping Has Increased
Among All Generations in the Last Year
Generation/Year |
2017 |
2018 |
Gen Z |
4.6% |
4.9% |
Millennials |
3.9% |
4.1% |
Gen X |
3.4% |
3.6% |
Baby Boomers |
2.7% |
2.9% |
Silent Generation |
1.7% |
1.8% |
“Increased auto insurance shopping is a good thing for both
carriers and consumers. Carriers have an opportunity to increase
their business while consumers may secure even better rates,” said
Mark McElroy, executive vice president and head of TransUnion’s
insurance business unit. “Younger consumers often do not yet have
homes and the need for homeowners insurance. As a result, this
makes it easier for them to leverage the ability to shop with ease
to find the best coverage to suit their individual needs.”
Subprime Consumers Also Driving Growth as Carriers
Increase Advertising SpendTransUnion’s research also found
that subprime consumers continued to play a major role in auto
insurance shopping in the first quarter of 2019. This is a
continuation of trends observed in 2018 when subprime consumers
were 68% more likely than prime consumers to shop for personal auto
insurance. The rate at which they shopped was nearly twice as much,
on average, when compared to prime or above credit consumers during
the same time period.
“This group of consumers tends to pay higher premiums than prime
consumers. They want to find better rates and are therefore
shopping more frequently,” said David Drotos, vice president of
insurance solutions at TransUnion.
Average Shopping Rates for Q1 Based on
Credit Tier (2017-2019)
Risk Tier/Timeframe |
Q1 2017 |
Q1 2018 |
Q1 2019 |
Subprime
(score<=600) |
4.3% |
4.7% |
4.6% |
Prime and above (score >
600) |
2.5% |
2.8% |
2.6% |
The boost in auto insurance activity also may be due to
increases in advertising spend by insurance carriers. A recent Auto
Insurance Report story found that 2018 marketing spend was at $7.5
billion, an all-time high. This was an immense increase from 2017
when the advertising spend was $6.6 billion.i
“Last year we examined the decrease in auto insurance shopping,
which we found to be correlated to the decline in advertising
spend. We think it’s safe to say that insurers are now seeing the
value in increasing those budgets,” Drotos added.
Helping Carriers Make Better
DecisionsInformation from this research is partly driven
by TransUnion’s work with insurance carriers. TransUnion helps
insurance carriers access credit-based and risk-management
solutions to help make better decisions about the consumers they
insure. For instance, there are three TransUnion solutions that
help carriers better target the right consumers and ease the
verification and quote process:
- Acquisition Triggers leverage shopping intent signals present
on the consumer credit database to provide carriers a way to
actively market to consumers who are in, or soon to be in, market
for auto insurance.
- Digital Marketing Solutions enable the creation of smarter
audiences through data that spans attributes across consumer
finance, demographics, lifestyle and observed shopping
signals.
- Lead Scoring enables carriers to qualify clicks, calls and
leads to align in-market insurance shoppers with insurance
carriers.
For the complete study about the TransUnion Auto Insurance
Shopping Index, please click here.
About the TransUnion Auto Insurance Shopping
IndexThis study is based entirely on TransUnion data
assets. The auto insurance shopping trends reported are based on
TransUnion’s internal Auto Insurance Shopping Index 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 2015 to March 2019. The Index
focuses on the credit population, highlighting TransUnion’s data.
It also explores a subset of the total insurance shopping
population. The Index 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)Information is a
powerful thing. At TransUnion, we realize that. We are dedicated to
finding innovative ways information can be used to help individuals
make better and smarter decisions. We help uncover unique stories,
trends and insights behind each data point, using historical
information as well as alternative data sources. This allows a
variety of markets and businesses to better manage risk and
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across North America, Africa, Europe, Latin America and Asia.
Through the power of information, TransUnion is working to build
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worldwide.
We call this Information for Good®
http://www.transunion.com/business
Contact |
Dave Blumberg |
|
TransUnion |
|
|
E-mail |
david.blumberg@transunion.com |
|
|
Telephone |
312-972-6646 |
_____________________________i “Insurer Advertising Jumps 13.2%,
Thanks to Returning Profitability.” Auto Insurance Report. Vol.
26#31/1232 (May 6, 2019): Pages 1-2.
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