Auto Insurance Shopping Reaches New High in Q1 2024
This trend bolsters hopes that the personal lines insurance industry will move toward profitability in 2024. However, the current high interest rate environment continues to strain consumers’ wallets and dampen the housing market, which creates challenges for property insurance carriers. These insights and more are part of TransUnion’s latest quarterly Insurance Personal Lines Trends and Perspectives Report.
“As insurers see improved profitability, it’s likely that some will cautiously increase investments in customer acquisition,” said Stothard Deal, vice president of strategic planning for TransUnion’s insurance business. “It will be paramount that they maximize those investments by identifying the best audiences, based on their likelihood to purchase as well as their overall risk levels.”
Shopping by geography
The report found consumers from the West and Midwest regions were particularly active in Q1 2024, marking a shift from the previous year when all regions, except the Northeast, had proportionately equal change in the numbers of auto insurance shoppers. Rising costs of living in both regions were likely the motivating factor.
The Midwest, which has historically had the lowest average premiums, experienced the most significant rate increase in the past two years. In addition, lower income levels and inflation have consumers in this region looking for ways to save money.
Consumers from states in the West are already accustomed to higher costs of living but have experienced increasing pressure from inflation. In addition, carriers have raised premiums or implemented underwriting restrictions, forcing many to shop for alternatives.
On a positive note, consumers are still eager to purchase new and used vehicles, which will also benefit auto insurance shopping. Approximately 23% of consumers have indicated plans to purchase or lease a vehicle to replace an existing one within the next 12 months, an increase from the 17% who said so in 2023.
Interest rates suppress property insurance shopping
While auto insurance shopping increased in Q1 2023, property remained flat at 0% YoY, though recovering from a seasonally lower fourth quarter. Activity was further hindered by mortgage rates that approached 8% by the end of 2023. This caused more consumers to opt out of purchasing new homes or parting with existing homes financed under more favorable rates.
The report notes that industry experts expect rates to come down to 6.4% in 2024, which may bring more potential homebuyers to the market. In the meantime, the most active shoppers currently are those with the highest credit-based insurance scores (indicating lower risk); belonging to younger generations, such as Gen Z and Millennials; and predominantly from the West and Midwest regions.
Leveraging this kind of demographic data, along with other consumer attributes, can help insurers find their best audiences for marketing campaigns. TransUnion’s TruAudience® solution line provides robust identity-based data to reach consumers most likely to convert.
Click here to read the latest Insurance Personal Lines Trends and Perspectives Report.
About TransUnion’s Insurance Personal Lines Trends and Perspectives 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 Perspectives Report research is based almost entirely on TransUnion’s extensive internal data and analyses. It includes information on insurance shopping transactions from
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