ATLANTA, May 19, 2020 /PRNewswire/ -- LexisNexis®
Risk Solutions released today the Q2 2020 Insurance Demand Meter,
which highlights trends from Q1, and also reveals how the
coronavirus pandemic is impacting U.S. consumer auto insurance
shopping though April 2020. According
to the Meter, shopping events have closely mirrored other national
developments with the pandemic – from a marked decrease correlated
to the stay-at-home orders to an increase that appears to coincide
with the timing of the federal stimulus checks1. The
report additionally highlights COVID-19's impact by age group,
geography and shopping channel.
According to LexisNexis data, U.S. auto insurance shopping
showed an average year to year growth rate of +7% from January
through early March. This began to change on March 16, when it declined to -11% year-over-year
growth, the lowest level seen since LexisNexis began tracking
shopping patterns more than a decade ago. Activity rebounded a few
weeks later, returning to an average growth rate of +8%. Similarly,
new business volume growth has decreased at unprecedented rates,
shrinking -10% in March and -14% in April. For Q1 2020, this
represents a decline of 52% compared to Q1 2019 and tracks to a
historical 5-year average decrease.
"The year started with the highest shopping rate ever, with 41%
of all policies having been shopped in the past year. But it became
clear that COVID-19 started to affect auto insurance shopping
activity in mid-March," said Chris
Rice, senior director of data science, insurance, LexisNexis
Risk Solutions. "Not only did shopping volumes decrease, but new
business volumes dropped even more as most carriers offered short
term rebates to existing customers, making it difficult for
consumers to find lower premiums with a new carrier. We will
continue to evaluate the effect of COVID-19 in the next few months
to see if the market balances itself, likely driven by changing
unemployment rates and advertising."
The COVID-19 Impact on Shopping
While COVID-19
impacted auto insurance shopping volumes for all consumers,
differences emerged by age group, geography and shopping
channel.
Age Group
In terms of age, the pandemic had the
biggest impact for shoppers ages 35 and younger with growth rates
down by more than -20% among this demographic group. Shoppers ages
55 and older kept on pace with a multi-year growth trend despite
the pandemic, and their shopping surged by 32% around the time of
stimulus checks, and since then shopping has leveled off to the
pre-COVID growth rate.
State-by-State
While the timing of declines were
consistent in nearly every state, Insurance Demand Meter data
showed variances in how quickly volumes dropped state-by-state and
how far they dropped. Among the states with the highest coronavirus
cases2, the State of New
York's growth rates dropped the fastest and bottomed out at
-26%. Countrywide, shopping volumes dropped as much as -31% to as
little as -6% compared to Pre-COVID volumes.
Shopping Channels
Across the three types of insurance
shopping channels – direct, exclusive agent and independent agent –
the direct and independent agent channels took the biggest hits
during the worst of the pandemic at -26% and -24% respectively. By
contrast, exclusive agent carriers saw a far more modest decline of
-9%.
"The U.S. auto insurance market has shrunk as a result of the
pandemic, but carriers giving money back and the pause in
cancelling policies for non-payment have also likely helped
stabilize these shifts and could help it rebound," said Tanner
Sheehan, associate vice president of auto insurance at LexisNexis
Risk Solutions. "Insurance is essential to the economy in terms of
sustainability and growth. We look at insurance shopping and new
policy purchases as barometers for broader consumer behavior as
well as specific insurance market conditions relating to rate
levels, advertising spend, and changes in mobility. When
fluctuations occur, it is critical that insurance companies
understand what's happening to the industry as a whole and within
their organizations."
The LexisNexis Insurance Demand Meter is a quarterly analysis of
shopping volume and frequency, new business volume and related data
points. LexisNexis Risk Solutions offers this unique market-wide
perspective of consumer shopping and switching behavior based on
its analysis of billions of consumer shopping transactions since
2009, representing nearly 90% of the universe of shopping
activity.
To download the Q2 2020 report, click here.
About LexisNexis Risk Solutions
LexisNexis® Risk
Solutions harnesses the power of data and advanced analytics to
provide insights that help businesses and governmental entities
reduce risk and improve decisions to benefit people around the
globe. We provide data and technology solutions for a wide range of
industries including insurance, financial services, healthcare and
government. Headquartered in metro Atlanta, Georgia, we have offices throughout the world
and are part of RELX (LSE: REL/NYSE: RELX), a global provider
of information and analytics for professional and business
customers across industries. For more information, please
visit www.risk.lexisnexis.com, and www.relx.com.
Media Contacts:
Rocio
Rivera
LexisNexis Risk Solutions
Phone: +1.678.694.2338
rocio.rivera@lexisnexisrisk.com
Mollie Holman
Brodeur Partners for LexisNexis Risk Solutions
Phone: +1.646.746.5611
mholman@brodeur.com
1 https://home.treasury.gov/news/press-releases/sm975?mod=article_inline
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2 https://www.worldometers.info/coronavirus/country/us/
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SOURCE LexisNexis Risk Solutions