Attempted Rally for Personal Insurance Shopping in Third Quarter Partly Suppressed by Hurricane Ian Devastation
While starting the quarter in a depressed state, auto shopping saw
some improvement in Q3 until Hurricane Ian’s impact on the East
Coast drove the market sharply back down. As a result, TransUnion’s
(NYSE: TRU) Personal Lines Insurance Trends and Perspectives Report
found auto insurance shopping rates ended down 2% compared to Q2
2022 and 1% lower than in 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.
Homebuyers are carrying property insuranceWhile
property insurance shopping decreased 1% on a quarterly basis and
was down 7% from last year, Q3 2022 saw shopping activity somewhat
buoyed by real estate purchases, due to a consistently elevated
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 during 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
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.”
For additional insights into the personal lines insurance
marketplace, the full report can be accessed here.
About TransUnion’s Insurance Trends and Perspectives
ReportFormerly, 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
Perspectives 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
About TransUnion (NYSE: TRU)TransUnion is a
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in the modern economy. We do this by providing an
actionable picture of each person so they can be reliably
represented in the marketplace. As a result, businesses and
consumers can transact with confidence and achieve great things. We
call this Information for Good®.
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