TransUnion report identifies Hurricane Ian’s effect on auto and property insurance markets

Chicago, Nov. 16, 2022 — While starting the quarter in a depressed state, auto shopping saw some improvement in Q3 until Hurricane Ian’s impact on the East Coast states drove the market sharply back down in early October. As a result, TransUnion’s Personal Lines Insurance Trends and Perspectives Report found auto insurance shopping rates ended down 2% compared to Q2 2022 and down 1% compared to Q3 2021.

The slightly positive movement in the quarter can be attributed partially to an improved inventory of new automobiles that drove sales up 11% in October, compared to the same time last year, according to J.D. Power and Associates.

“The good news this quarter is that automobile inventories saw signs of relief to better meet pent up consumer demands,” said Michelle Jackson, senior director of personal property and casualty insurance in TransUnion’s insurance business. “What’s more, the demand itself is likely increasing as more employees are commuting into the office─all of which should have knock-on effects for auto sales and insurance shopping.”

Another important factor in shopping trends is the fact that costs for insurers continue to rise; in turn, insurers are increasing their premium prices. Given the impact of inflation, consumers are looking to cut costs wherever possible and are looking to switch insurance carriers for lower rates.

The motivation to find lower auto rates has also impacted the property insurance industry, with many consumers bundling their policies. Those who are trying to find a lower auto insurance premium will likely want to maximize savings by switching their property insurance carrier as well.

Homeowners are carrying property insurance

While property insurance shopping ended down 1% on a quarterly basis and down 7% on an annual basis, Q3 2022 saw shopping activity somewhat buoyed by real estate purchases,  due to a consistently elevated migration trend.

Gen Z consumers, who are increasingly coming of age, had the highest migration increases thus far in 2022. Many in this group also likely had their launch into independence delayed by the pandemic, which may help explain their current spike in migration. Generally, consumers continue to move to lower-cost states with booming economies like Texas, Florida and North Carolina.

However, these trends were mostly evident for homeowners. Renters’ migration was suppressed over the past three quarters as rising prices have kept may renters locked in place─particularly those who live in larger cities that may have instituted rent freezes over the pandemic. The prospect of leaving such a situation would likely mean higher rents anywhere else.

There is a possible bright spot in that August 2022 saw rent prices drop for the first time in two years. Nevertheless, demand is likely to remain high, with rising mortgage rates and elevated housing costs preventing a substantial number of people from buying homes.

Altogether, these trends underscore the importance of effective consumer engagement and acquisition, which will require carriers to modernize their strategies across diverse channels.

“The best advice we can give insurers is to optimize a streamlined and secure quoting process,” said Jackson. “These are becoming more important for all consumers, but are absolutely tablestakes for the emerging Gen Z cohort.”

About TransUnion’s Insurance Trends and Perspectives Report

Formerly, the Personal Lines Insurance Shopping Report, this quarterly publication examines trends in the personal lines insurance industry, including shopping, migration, violation, credit-based insurance stability and more. The Trends and Perspecitves Report research is based entirely on TransUnion’s extensive internal data and analyses. It includes information on insurance shopping transactions from April 2021 to October 2022. However, the report excludes data from insurance customers in California, Hawaii, and Massachusetts, where credit-based insurance scoring information is not used for insurance rating or underwriting.