LexisNexis Demand Meter Shows U.S. Auto Annual Insurance Shopping Rate Decreased in Q3

Rhea-AI Summary

The LexisNexis Risk Solutions Insurance Demand Meter report reveals a -3.9% decline in the annual U.S. auto insurance shopping growth rate for Q3 2021, with new policy growth at a two-year low of -7.3%. This downturn follows a downward trend from earlier in the year, driven by macroeconomic factors including global microchip shortages affecting car inventory and rising used car costs. The report indicates that more consumers are staying with their current carriers, influenced by rate increases and the lifting of state moratoria on policy cancellations.

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• -3.9% decrease in annual U.S. auto insurance shopping growth rate in Q3 2021.
• -7.3% drop in new policy growth, the lowest in two years.
• Increased number of consumers leaving the auto insurance market compared to the last four years.
• Factors like rising claims frequencies and lack of collision coverage led to fewer new car purchases.

ATLANTA, Nov. 22, 2021 /PRNewswire/ -- The latest edition of the LexisNexis® Risk Solutions Insurance Demand Meter reports the overall annual U.S. auto insurance shopping growth rate decreased to -3.9% for Q3 2021. New policy growth also reached a two-year low, dropping to -7.3% for the quarter. While negative growth rates have been rare over the past decade, decreases in new business policy growth followed the downward trend that began in May and June as the insurance industry continues to face unparalleled circumstances and economic factors.  

"Insurance shopping in Q3 returned to levels that compare to 2019 and years prior rather than following the unusual trends of 2020," said Adam Pichon, vice president of personal lines insurance at LexisNexis Risk Solutions. "Prior quarters this year were fueled by consumers returning to normalcy, but that pattern was tempered by macroeconomic and carrier-driven factors that began impacting the market in Q2 and carried over into the third quarter."   

Market Forces Impacted Q3 2021 Shopping
More consumers stayed with their current insurance carrier than in previous quarters, compared to the same time last year. Several micro and macroeconomic trends impacted insurance shopping in Q3, including:

• Global microchip shortages fueled new car inventory shortages and rising costs for used cars meant fewer overall new and used car purchases, which typically account for one in three shopping events;
• Claims frequencies have increased with drivers returning to the roads, which can lead to insurance carriers filing for rate increases and decreasing marketing spend to address profitability challenges. In some states where regulators have not approved increased rates, decreased carrier marketing spend is notable; and
• State-issued moratoria on policy cancellations were lifted, which may have caused more consumers to keep their policies than would normally occur.

Consumers Leave U.S. Auto Insurance Market in Q3
In Q3, more U.S. consumers began leaving the auto insurance market, in volumes higher than the previous four years. This pattern was potentially influenced by rate increases and by the car shortage, where policy holders who lacked collision coverage may have been unable to replace vehicles.   

"Leveraging more than ten years trends, we have seen the cyclical nature of insurance shopping trends," said Chris Rice, associate vice president of strategic business intelligence, insurance, at LexisNexis Risk Solutions. "Consumers shop when they see their premiums increase, which often results from either a consumer experiencing a life event, such as purchasing a new home or vehicle or adding a newly licensed driver, or a higher bill when their policy renews as a result of a claim, a traffic violation, or their carrier raising rates."

Download the latest Insurance Demand Meter.

About the 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 and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. 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 and analytics for professional and business customers. For more information, please visit www.risk.lexisnexis.com, and www.relx.com.

Media Contacts:
Regina Haas
LexisNexis Risk Solutions
Phone: +1.678.694.3569
regina.haas@lexisnexisrisk.com

Mollie Holman
Brodeur Partners for LexisNexis Risk Solutions
Phone: +1.646.746.5611
mholman@brodeur.com

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SOURCE LexisNexis Risk Solutions

FAQ

What does the latest LexisNexis Risk Solutions report indicate for auto insurance shopping in Q3 2021?

The report shows a -3.9% decline in annual U.S. auto insurance shopping growth and a -7.3% drop in new policy growth.

What were the contributing factors to the decline in auto insurance shopping in Q3 2021?

Key factors include global microchip shortages, rising used car costs, and increased claims frequencies.

How has consumer behavior changed in regards to auto insurance in Q3 2021?

More consumers are staying with their current insurance providers, leading to an increased number of consumers leaving the auto insurance market.

Which organization is responsible for the Insurance Demand Meter report?

The report is published by LexisNexis Risk Solutions, part of RELX.