Property and auto insurance shopping in the second quarter of 2022 was generally subdued with variations in certain segments, according to the latest trends and perspectives report from TransUnion, the global information and insights company.
The quarterly report found shopping for homeowners insurance rose only slightly (4%) compared to the same period last year, mostly driven by activity in the southern states where shopping was up 12% compared to last year.
Auto insurance shopping was down 3% overall compared to a year ago, apparently the result of a big decrease by higher-risk consumers, where shopping was down 22% compared to the second quarter of 2021.
“We were surprised at the shopping behavior around the auto space,” said Mark McElroy, executive vice president and head of TransUnion's insurance business. “We can see the effects of supply chain disruptions and a lack of new vehicle inventory.”
TransUnion regularly reviews insurance shopping trends, and breaks down the data by geographic region, age, and other factors. It uses customer engagement information from insurance companies and extrapolates across the entire industry. It supplements the research with field surveys with consumers to evaluate current market and insurance trends.
Several other key findings:
• When comparing consumers across credit tiers, there was a clear outlier to the overall trend in that consumers with high credit scores continued to increase their auto insurance shopping.
• Renters insurance shopping decreased significantly (10%) in Q2 2022. While shopping was down across all generations, shopping among Baby Boomer and Silent Generation renters decreased 16%, compared to Q2 2021.
• Shopping in Q2 2022 among Gen Z renters decreased 12%, compared to Q2 2021. This may be attributable to an overall rise in rents: According to a joint TransUnion and National Apartment Association analysis of more than 300,00 rental units in the U.S., the median monthly rent price force 17% from $1,365 a month, to $1,599. Rising rents typically drive tenants to stay in place rather than seeking new apartments, the report concluded.
“The lack of new vehicle purchases suppressed overall auto insurance shopping,” said Michelle Jackson, senior director of personal property and casualty insurance, in TransUnion’s insurance business. “Even with the influx of consumers shopping their auto insurance as premiums increase from industry-wide rate increases, this cannot overcome the suppressed shopping rates we are seeing from consumers not purchasing new cars, thus creating a shopping event.”
Migration impacts homeowners insurance
Migration activity to southern states drove homeowners insurance shopping. Overall homeowners insurance shopping saw a modest increase (4%) in Q2 2022, compared to the same time last year. That trend was primarily driven by activity in the Southern United States, where shopping was up 12%, compared to Q2 2021.
“We’re still seeing interest in relocating to sunnier environments, which has led to increased homeowners’ insurance shopping in states such as Florida and Texas, which ironically are states that are more prone to extreme weather events and more expensive insurance,” said Jackson. “However, consumers in the housing market are increasingly facing headwinds from rising mortgage interest rates and housing costs, which has tempered the rate of purchases and refis, and consequently, insurance shopping.”
There are signs that the market will rebound, the report said. According to a Consumer Pulse survey conducted in the second quarter, 32% of consumers said they will apply for a mortgage within the next year, a 4% increase from the first quarter. Millennials – those aged between 25 and 40 years old – led all generations at 40%. This corresponds to the data that found homeowners shopping by generation, with Gen X and millennials seeing the highest uptick in year-over-year shopping (between 11%–14%).
“The millennials, as a generation, are the lead drivers in a lot of the real estate transactions today,” said McElroy.
Looking ahead, McElroy said as loss costs level for the insurance industry and supply chain disruptions are alleviated, the market should begin to bloom.
Doug Bailey is a journalist and freelance writer who lives outside of Boston. He can be reached at [email protected].