Even with the ongoing economic impacts of the COVID-19 pandemic,
overall personal auto insurance shopping rates in the first half of
2020 surpassed 2019 levels. The 2020 Insurance Shopping Annual
Report from TransUnion (NYSE: TRU) found overall shopping rates
were higher year over year in the first few months of 2020 until
the week of March 22 – near the onset of the pandemic – when
shopping plummeted 14% below the previous year. However, shopping
rates reversed in May and have continued to trend higher through
June.
Many factors are impacting auto insurance shopping –
particularly amidst COVID-19 – and these dynamics vary across
generations, regions and financial situations. To better understand
these driving forces, TransUnion conducted an online survey of more
than 3,000 U.S. auto insurance policyholders, aged 18 years or
older, during the week of July 27.
Nearly one-third (30%) of survey respondents said a major life
event was a key force behind their decision to shop for auto
insurance, followed by a need to reduce expenses due to COVID-19’s
impact on household income (24%). Typical life events that drive
auto insurance shopping include marriage, having a child, buying a
new home, among others. As the COVID-19 pandemic lingers, new life
events may be impacting the need for auto insurance shopping,
including job loss, reduction in pay, etc.
“While our annual insurance shopping report shows shopping has
stabilized for the time being, we will likely see shifts in these
trends due to the significant, ongoing financial impacts of the
COVID-19 pandemic,” said Mark McElroy, executive vice president and
head of TransUnion’s insurance business unit. “The state of auto
insurance shopping remains uncertain, and it will be critical for
insurance carriers to adapt to these changing shopping behaviors
and differing consumer needs. Our latest report helps equip
carriers with timely insights to build a reliable basis of trust
between insurance businesses and their customers.”
Auto Insurance Shopping Trends* |
Month |
2019 Shopping Rate |
2020 Shopping Rate |
% Change 2019-2020 |
January |
2.9% |
3.4% |
+18% |
February |
2.9% |
3.1% |
+9% |
March |
3.1% |
3.0% |
-3% |
April |
3.0% |
2.8% |
-8% |
May |
2.9% |
2.9% |
0% |
June |
2.8% |
3.1% |
+12% |
*The above shopping rates are rounded to the nearest tenth;
percent change is rounded to the nearest whole number
Before COVID-19 was declared a global pandemic in early March,
TransUnion observed insurance shopping rates trended higher on an
annual basis for eight straight months. This upward trend was
directly correlated to the insurance industry’s increased marketing
spend from 2012 to 2019.1
As the pandemic set in and many individuals limited their miles
driven, advertising spending fell 2 and carriers turned their
attention to positioning themselves as partners in these uncertain
times, including through premium rebates. In fact, U.S. auto
insurance companies offered about $10.5 billion in insurance
premium rebates to customers in an effort to provide COVID-19
financial relief, according to the Insurance Information
Institute.
The rebates have proven to be beneficial for both policyholders
and carriers. TransUnion’s survey reveals 22% of current auto
policyholders considered delaying auto insurance payments due to
COVID-19. And for the policyholders who recall being contacted by a
carrier about a premium relief or discount (45%), six in 10 (61%)
said the gesture increased their loyalty to their auto insurer.
Simultaneously, in the time since shopping bottomed out in
April, TransUnion observed shopping rates rebound in May to 2.9%
and continue into June at 3.1%, exceeding the June shopping rates
in both 2019 and 2018.
“While the rebound in shopping rates for May and June is a
positive movement, it’s too soon to determine whether this trend
will continue given the variety of factors likely at play,” said
David Drotos, vice president of insurance solutions at TransUnion.
“As highlighted in the 2020 Insurance Shopping Annual Report, we’re
seeing premium rebates, stimulus checks and expanded unemployment
benefits through the CARES Act likely contributing to this
increased shopping activity. These considerations will be integral
for carriers and shoppers in navigating the uncertain days
ahead.”
Younger consumers driving auto insurance shopping likely
due to the differing financial impacts of COVID-19
In the first half of 2020, younger generations continued to
drive increased shopping rates when compared to older generations.
The report found Gen Z had a sharp spike in shopping year over year
for Q1 2020 compared to all other generations. This spike was
subsequently followed by a dip at the beginning of Q2 across all
generations, though more pronounced for Gen Z and Millennials, and
rates have since rebounded.
Generational Percent Change in Auto Insurance Shopping
Between 2019 and 2020 |
Month |
Gen Z |
Millennial |
Gen X |
Baby Boomer |
Silent Generation |
January |
+32% |
+13% |
+17% |
+15% |
+11% |
February |
+23% |
+4% |
+7% |
+6% |
+4% |
March |
+3% |
-8% |
-2% |
-1% |
-1% |
April |
+1% |
-11% |
-4% |
-3% |
-1% |
May |
+19% |
-5% |
-4% |
-4% |
-2% |
June |
+31% |
+8% |
+8% |
+6% |
+6% |
While the industry has seen shopping driven by younger drivers
in recent years, the negative economic impacts of COVID-19 are
likely intensifying these trends as younger generations face more
financial challenges and price sensitivities. TransUnion’s survey
of auto policyholders found a higher percentage of younger
consumers have had their household income negatively impacted by
COVID-19 compared to older consumers (Gen Z: 61%; Millennial 60%;
Gen X: 55%; Baby Boomers: 44%).
“Differences in shopping behavior have become more acute in 2020
as a result of exacerbated disparities due to the pandemic,
particularly when comparing across generations and financial
situations. As social and economic circumstances continue to evolve
throughout 2020, carriers can use these insights to build a deeper
understanding of what drives consumers to shop as well as their
customers’ needs amidst the uncertainty ahead,” concluded
Drotos.
TransUnion is hosting a webinar on September 17 at 1:00 p.m. CT
titled, “You Can Quote Me: Trends and Insights in Insurance
Shopping.” Insurance industry professionals that are interested in
learning more can register for the webinar here.
The 2020 Insurance Shopping Annual Report also arms carriers
with auto insurance shopping trends by region, macroeconomic
impacts, state GDP, customer risk and asset ownership, among
others. For the complete study, please click here.
1 TransUnion internal insurance shopping data, January 2019–June
20202 Mintel - Estimated direct mail volume for P&C insurers
January-May 2020
About TransUnion’s Insurance Shopping Annual
Report
The 2020 Insurance Shopping Annual 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 June 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 |
Dave Blumberg |
|
TransUnion |
|
|
E-mail |
david.blumberg@transunion.com |
|
|
Telephone |
312-972-6646 |
TransUnion (NYSE:TRU)
Historical Stock Chart
From Mar 2024 to Apr 2024
TransUnion (NYSE:TRU)
Historical Stock Chart
From Apr 2023 to Apr 2024