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.

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LexisNexis Risk Solutions

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