Thursday, 11 August 2022 12:02

LexisNexis Insurance Demand Meter Shows Continued Downward Pressure in U.S. Auto Insurance Shopping Patterns


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The latest edition of the LexisNexis® Risk Solutions Insurance Demand Meter reported the annual U.S. auto insurance shopping growth rate, which includes shopping and new policies, dropped for the fourth consecutive quarter for the first time since LexisNexis Risk Solutions began releasing these quarterly metrics.

Shopping was down 2.0% in Q2 2022 versus Q2 2021 as the industry continues to face significant headwinds, including rising claims costs forcing insurers to continue to implement rate increases in many U.S. states. On the consumer side, inflationary pressures and vehicle shortages are leaving many potential shoppers on the sidelines where they might have traditionally shopped their policies.


New policy growth declined 7.1% for the quarter versus Q2 2021 as insurers continued to scale back marketing spend, though this was an improvement from the 11% year-over-year decrease seen in Q1 2022.


"This confluence of factors---rate taking by carriers due to profitability concerns, a slowdown in marketing spend, consumers grappling with inflation and fewer dollars to spend, vehicle shortages and rising interest rates---these are compounding right now, leaving the insurance industry in a continued state of flux," said Adam Pichon, vice president and general manager, auto insurance, LexisNexis Risk Solutions. "We've seen a lot of consumers leaving the market due to affordability concerns, which means many of those uninsured drivers will eventually re-enter the market. But the question is when."


Identifying the Right Growth Targets Critical for Insurers


For the first time since the beginning of the pandemic, middle-aged consumers (35-46) shopped at the highest rate of any age demographic, likely due to inflationary concerns and rate increases at renewal. This comes on the heels of several quarters in a row of younger shoppers (16-35) leading the way thanks to federal stimulus checks and tax filing deadlines being altered due to the pandemic.


"This middle-aged demographic is traditionally a profitable segment for insurers," said Pichon. "Even in these challenging times, carriers who are able to...

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