According to the LexisNexis Insurance Demand
Meter, a "Sizzling" Q1 2024 for new policies showed consumers are
still not resigned to higher rates as insurers continue to adjust
strategies to retain customers for long-term growth
ATLANTA, May 16, 2024
/PRNewswire/ --
Key takeaways
- U.S. consumer auto insurance shopping activity registered as
"Hot" on the LexisNexis® Insurance Demand Meter, as
quarterly year-over-year shopping grew 2.9% for Q1 2024 (slowing
slightly from last quarter's 4.7% increase
year-over-year).
- The quarterly year-over-year growth for new policies was
"Sizzling," up 8.7% for Q1 2024 (and up again from +7.0% last
quarter).
- Quarterly year-over-year new policy growth increased, trending
up for the seventh consecutive quarter and 20th
straight month, meaning consumers continue to switch carriers
at an increasing rate when they shop.
- Even as March saw a slightly lower shopping growth rate from
the previous year – which may be attributable to fewer workdays and
more weekends than in 2023 – 42% of insured households shopped
in the last 12 months.
- When comparing all years back to 2021, the consumers most
likely to be retained by their existing insurance company – or
those who have been loyal for 10+ consecutive years – comprised
less than 20% of the shopper pool. Through Q1 2024, this cohort
has grown to 24% of total shoppers.
- More drivers entering the market: In Q1 2024, the growth
in new drivers largely offset the number of leavers. This bucks the
trends observed in 2022 and 2023 where a record number of consumers
left the market in response to higher premiums.
Tax refunds, older shoppers and Leap Day fuel shopping
activity
- In Q1 2024, older shoppers (66-year-old and over)
looked for insurance at the highest clip, with higher premiums
helping incentivize those on fixed incomes to shop.
- Tax season delivered a shopping boost as more
uninsured consumers re-entered the market despite purchase rates
remaining lower than historical averages for the uninsured
population.
- Despite healthy shopping patterns for Q1 overall, March was
the outlier with shopping growth falling slightly
negative.
"As we have seen more shopping in recent months from consumers
who have traditionally been longer-tenured and more loyal, insurers
with an appetite for growth may still have an opportunity to
capitalize as these consumers seek to lower their premiums," said
Adam Pichon, senior vice president, global analytics,
LexisNexis® Risk Solutions. "Insurers may also want to consider
implementing stronger retention strategies as they seek to return
to rate adequacy and profitability, including more proactive and
selective monitoring of their renewal books to help identity and
retain those loyal policyholders."
Looking ahead
Though shopping has remained high
through the first three months of 2024, it has not outpaced
shopping growth from Q4 2023. With that in mind, Q2 2024 could
serve as a litmus test as to whether the market could see a
slowdown in shopping like last year or if there will be a shift in
traditional consumer shopping behavior.
"Fewer large rate increases are being implemented by many
insurers, but will traditionally loyal consumers now continue to
shop, having realized there may be opportunities to save in the
future? If so, this could present yet another shift in the shopping
paradigm insurers must consider," said Pichon. "Those insurers with
a measured approach to acquiring the right new business and
retaining their most profitable business stand poised to gain
market share as the industry overall continues to climb back to
profitability."
Download the latest Insurance Demand Meter.
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,
sophisticated analytics platforms and technology solutions to
provide insights that help businesses across multiple industries
and governmental entities reduce risk and improve decisions to
benefit people around the globe. 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-based
analytics and decision tools for professional and business
customers. For more information, please
visit www.risk.lexisnexis.com, and www.relx.com.
Media Contacts:
Chas
Strong
LexisNexis Risk Solutions
Phone: +1.706.714.7083
Charles.Strong@lexisnexisrisk.com
Dean Carney
Brodeur Partners for LexisNexis Risk Solutions
Phone: +1.646.746.5607
Dcarney@brodeur.com
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SOURCE LexisNexis Risk Solutions
