U.S. consumer auto insurance shopping activity remained elevated in the first quarter of 2025, with year-over-year shopping growth reaching 16%, according to the latest U.S. Insurance Demand Meter from LexisNexis Risk Solutions. Although slightly cooler than the previous quarter, the Q1 2025 figures remained well above historical norms.
New auto policy growth reached 8.4% over the same period, supported by seasonal tax refunds and an uptick in new vehicle purchases, likely spurred by anticipated impacts from vehicle tariffs. Notably, the most significant demographic change came from older consumers: those aged 66 and above led all age groups in shopping activity with a 19.7% year-over-year increase.
“Macro forces like tax refund season and tariff concerns are helping shape consumers’ auto insurance shopping behavior in meaningful ways,” said Jeff Batiste, senior vice president and general manager of U.S. auto and home insurance at LexisNexis Risk Solutions. “We also are seeing traditionally stable, high-value customer segments become more active in the market.”
Looking at regional growth trends, 10 states reported shopping growth of 20% or more. Hawaii topped the list with a 59% increase, followed by New Jersey (43%), Washington (33%) and Massachusetts (31%).
The rise in consumer activity was also marked by a shift toward direct distribution channels, which posted a 34% year-over-year increase, outpacing both independent and exclusive agent channels. Within the non-standard insurance market, policy shopping spiked by 30%, driven in part by uninsured shoppers entering the market with tax refund dollars.
Retention, however, continued to decline. Policy retention dropped to 78% in Q1 2025, down from 83% in early 2022. Churn rates have accelerated nearly 30% over the past three years, with approximately 6 million more policies switching hands annually compared to 2021. High-tenure policyholders and older consumers, once seen as stable segments, are now contributing significantly to the churn.
“As retention rates fall, insurers may need to replace more lost policies just to maintain growth,” Batiste added. “Acquiring new business is costly and often linked with higher claims frequency, which can negatively affect both loss and expense ratios. Carriers should remain disciplined in their underwriting approach.”
Looking ahead, LexisNexis Risk Solutions predicts continued market volatility as additional tariffs take effect and economic pressures persist. The firm advises insurers to refine their acquisition and retention strategies, monitor shopping trends closely, and prepare for a ripple effect across both auto and home insurance sectors.
The LexisNexis U.S. Insurance Demand Meter provides quarterly insights based on consumer shopping data representing nearly 90% of all U.S. insurance activity since 2009.
