One in Three Policyholders State They Went From Being Fully Insured to Under or Uninsured During the Pandemic

Rhea-AI Summary

TransUnion's 2021 Virtual Insurance Summit, held on May 13, highlighted the challenges insurers face as many consumers transitioned from full coverage to being under or uninsured during COVID-19. The Summit gathered over 150 insurance executives, discussing key trends like the K-shaped economic recovery, shifting migration patterns affecting insurance needs, and backlogged court cases impacting premiums. Notably, 34% of consumers reported coverage reduction, indicating a crucial opportunity for insurers to better engage and support policyholders in financial distress.

Positive

• Increased awareness among insurers about the need for personalized policies as 70% of surveyed consumers value auto insurance.
• Growth in existing home sales and average home prices, providing opportunities for insurance policy adjustments.

Negative

• 34% of consumers went from fully insured to under or uninsured, indicating widespread coverage issues.
• Backlogged court cases are negatively impacting auto insurance premium revenues, estimated to reduce personal auto conviction surcharge by 9%.

TransUnion’s 2021 Virtual Insurance Summit focused on identifying coverage adjustments needed as a result of COVID-19

CHICAGO, May 13, 2021 (GLOBE NEWSWIRE) -- One-third of consumers stated they went from being fully insured to under or uninsured during the COVID-19 pandemic. Only a small minority of this group adjusted their policy or payment plans. This is one of the challenges facing insurers today as they navigate through the pandemic, and it was among the featured topics in the just-completed TransUnion (NYSE: TRU) 2021 Virtual Insurance Summit.

The two-day Summit included more than 150 insurance executives from across the country. Key trends discussed during the meeting included best approaches to support policyholders during the K-shaped economic recovery, how migration patterns could affect insurers and the effects of backlogged court cases to the industry.

“It’s clear that COVID-19 has complicated the consumer experience as well as the affordability of insurance policies,” said Mark McElroy, executive vice president and head of TransUnion’s insurance business. “The research presented at our Summit stressed the importance for insurers to lean in to comprehensive data that provides a holistic view of the consumer. Doing so helps insurers better understand consumer needs and accurately price, quote and deliver personalized policies and solutions for their customers.”

TransUnion examined several trends during the Summit, three of which are highlighted below:

Trend #1: Helping Policyholders Climb out of the K-shaped Economic Recovery

In response to the financial hurt brought on by the pandemic, the U.S. government provided trillions of dollars in assistance. Among the assistance offered were accommodation programs allowing borrowers to delay payments on certain loans.

The number of accounts in accommodation peaked in the summer of 2020, and TransUnion research shows that there continues to be more accounts exiting accommodation than those entering. However, those who remain in accommodation are likely struggling, compared to those who entered in the early days of the pandemic. This group also likely needs the most assistance with their insurance payments.

A TransUnion survey of more than 2,000 U.S. consumers conducted in March 2021 and presented at the Summit elaborated on the challenges faced by some insurance policyholders. The survey found that 70% of respondents said it was important to have auto insurance. Yet, 34% stated that they went from being fully insured to under or uninsured during the pandemic. One in five (18%) respondents said they missed one or more payments; 27% said they canceled a policy.

Furthermore, of this group, many did not take advantage of every lever of affordability on their auto policy. Only 20% adjusted payment plans, 32% increased deductibles to lower premiums/regular payments and another 32% reduced coverage. “The results clearly point to opportunities for insurers to better support their policyholders. Insurers who engage their customers, especially those in a difficult predicament, can forge long-lasting relationships once the economy recovers,” said McElroy.

Trend #2: Migration Patterns Influencing Insurance Needs

Despite COVID-19, the housing market has experienced large growth over the last 12 months. Existing home sales are up from 5.7 million in February 2020 to 6.2 million in February 2021. As a result, there has been a 16% increase in average home prices between February 2020 ($270k) and February 2021 ($313k).

As the housing market remains active, TransUnion research found that many consumers are fleeing cities for less dense areas. For most major cities, the pandemic simply accelerated an already downward trend wherein large metro areas are becoming increasingly less popular.

The implications to insurers are plentiful. Most noteworthy, there will be changing mobility and risk distribution by territory, as more people populate these new areas. The migration patterns will also have an impact on vehicle demand and driving. Adjusting insurance policies for these individuals will be critical.

Trend #3: Backlogged Court Cases and the Impact to Insurers

Another consequence of COVID-19 and shutdown orders were operational delays in the judicial system. Courts are experiencing backlogs, which are affecting the recency of violations returned and conviction rates.

The average time to adjudicate increased by 16 days in 2020 over the prior year. Although certain court proceedings have resumed, many traffic-related cases remain backlogged. This action will likely have a lasting impact on the auto insurance industry in regards to premiums and pricing.

For instance, the impact of COVID-19 has reduced personal auto conviction surcharge revenue by an estimated 9% and contributes to negative premium drift; however, carriers can mitigate some of that impact by using court records. A TransUnion analysis found that there could be a 35% increase to surcharge revenue through the deployment of court records.

“The impacts of COVID-19 are certainly not over, and this means there are consumers on each end of the ‘K-shape’ – those who have been able to bounce back and others who still face significant hardship. In the year ahead, it will be more important than ever for insurers to consider the resources, partners and solutions that will allow them to have meaningful interactions with consumers and help them identify the coverage and adjustments to best meet their needs,” concluded McElroy.

Insurers seeking more information about the research and other tools to respond to the pandemic can complete the form found on TransUnion’s COVID-19 insurance website.

About TransUnion (NYSE: TRU)

TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing a comprehensive picture of each person so they can be reliably and safely represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good.®

A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.

http://www.transunion.com/business

Contact		Dave Blumberg
		TransUnion
E-mail		david.blumberg@transunion.com
Telephone		312-972-6646

FAQ

What trends were discussed at TransUnion's 2021 Virtual Insurance Summit for TRU?

Key trends included the K-shaped economic recovery, migration patterns affecting insurance needs, and the impact of backlogged court cases on premiums.

How many consumers reported being underinsured during the COVID-19 pandemic according to TransUnion?

34% of consumers stated they went from being fully insured to under or uninsured during the pandemic.

What is the estimated impact of backlogged court cases on auto insurance premiums for TRU?

Backlogged court cases are expected to reduce personal auto conviction surcharge revenue by approximately 9%.

How can insurers better support policyholders during recovery according to TransUnion's findings?

Insurers are encouraged to engage customers effectively, especially those facing difficulties, to build lasting relationships as the economy recovers.

What was the average increase in home prices reported in the Summit?

The average home prices increased by 16%, from $270,000 in February 2020 to $313,000 in February 2021.