ATLANTA, Aug. 28,
2024 /PRNewswire/ -- For the first time since
LexisNexis® Risk Solutions began benchmarking U.S. consumer auto
insurance shopping, policy growth and channel trends more than a
decade ago, both quarterly year-over-year shopping and new policy
growth registered as 'Nuclear' on the LexisNexis® Insurance Demand
Meter. Attributed to consumers motivated to shop amid increasing
premiums for both auto and home insurance, along with increased
marketing by insurance companies, the double-digit growth for both
shopping and for new policies in force could portend a staggering
amount of insurance shopping and new policies as the industry
emerges from its profitability concerns in 2023.
Key Takeaways
- U.S. consumer insurance shopping clocked in at 'Nuclear'
on the Insurance Demand Meter, as the quarterly year-over-year
shopping growth rate grew 16.1% for Q2 2024 (up from last
quarter's 2.9% increase).
- Quarterly year-over-year growth for new policies is also
"Nuclear," with a 19.5% increase for Q2 2024 (up from 8.7%
last quarter).
- By the end of Q2, the annual shop rate had risen to a
record 42.3%, led by four states with annual year-to-date
shop rates over 50% (Texas,
Fla., Ga., Ariz.).
- At the end of the quarter, 21% of the auto policies-in-force
were written in the last 12 months.
- Carriers reinstated marketing and new business lead
purchasing in Q2 to take advantage of rate-driven shoppers that
included both non-standard and long-tenured customers.
Direct-to-consumer (non-agent based) distribution channels
grew 38%, while captive agent and independent agent
channels grew 2.4% and 8.9%, respectively.
- New policy volumes dipped slightly from May to June, causing
shopping growth to outpace new policy growth in June
for the first time since April
2023.
Dual Impact: Home Insurance Shopping Influences the Auto
Market
With more than half of auto insurance shoppers owning
a home or condo, rate increases now taking effect in the
home insurance market are helping fuel shopping and switching
for many consumers. LexisNexis Risk Solutions analysis based on
S&P insurance rate filing data suggests that home and auto
market rates have increased similarly for the past 12 months[i].
Shopping frequency patterns for both home and auto insurance
consumers have also followed a similar trajectory. In fact, a
recent LexisNexis Risk Solutions consumer study[ii] found that
nearly four in 10 respondents with an existing home insurance
policy are shopping for their insurance regularly.
"In 2023, we highlighted that certain regions or states, such as
Texas, could serve as a potential
bellwether for the rest of the country after its implementation of
increased marketing expenditures and rate adjustments netted a
profitability outcome. At present, it is evident that other regions
took notice and capitalized or are capitalizing now on that same
window of opportunity," said Chris
Rice, vice president, strategic business intelligence,
LexisNexis Risk Solutions. "Consumers, for their part, have shown a
heightened sensitivity to price and predisposition to combined
personal line shopping that could give carriers an opportunity to
capitalize further."
Looking Ahead
After two years of stagnant growth in
the number of policies-in-force, the second quarter of this year's
increased shopping and purchasing activity approaches near-historic
levels. Despite possible fluctuations in shopping levels, recent
trends indicate that new policy growth could maintain record
volumes through the next quarter.
"We anticipate that the convergence of the Summer Olympics and
the U.S. presidential election will drive up the cost of media
advertising while diminishing its effectiveness, potentially
leading to a slowdown in consumer activity related directly to
advertising," said Rice. "However, given the anticipatory action
from carriers regarding marketing efforts this quarter, matched by
the positive consumer reception, there is reason to believe that
heightened shopping activity will continue."
Download the latest Insurance Demand Meter.
LexisNexis Insurance Demand Meter
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 insurance shopping
activity.
About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data,
sophisticated analytics platforms and technology solutions to
provide insights that help businesses across multiple industries
and governmental entities reduce risk and improve decisions to
benefit people around the globe. 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-based
analytics and decision tools for professional and business
customers. For more information, please
visit www.risk.lexisnexis.com, and www.relx.com.
Media Contacts:
Chas
Strong
LexisNexis Risk Solutions
Phone: +1.706.714.7083
Charles.Strong@lexisnexisrisk.com
Dean Carney
Brodeur Partners for LexisNexis Risk Solutions
Phone: +1.646.746.5607
Dcarney@brodeur.com
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ii What Homeowners Want: Understanding their
insurance preferences and behaviors, LexisNexis Risk Solutions,
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