ATLANTA, Feb. 18,
2025 /PRNewswire/ -- For the third consecutive
quarter, U.S. auto insurance shopping remains "Nuclear," according
to the LexisNexis® Risk Solutions U.S. Insurance Demand Meter,
while new policy growth registered at a "Sizzling" level. Insurers
saw 18% more consumers shopping in 2024 compared to 2023 levels. A
combination of consumers seeing their rates increasing in
conjunction with carrier-led marketing campaigns promoting lower
premiums helped entice policyholders into the market. Compared to
their behavior in previous quarters, those shoppers didn't
necessarily switch their policies.
Key Takeaways
- Consumers Continue to Shop: As of December 31, 2024, 45% of policies-in-force were
shopped at least once in the last 12 months.
- Shopping and New Policy Growth Increased Year-over-Year:
Shopping grew 26% in Q4 2024, while new policy growth was 17.7% in
Q4 2024.
- Insurance Not Included in Holiday Shopping Lists:
Similar to prior years, the number of new policies issued dropped
in November and December in 2024 as consumers shifted their focus
to the holiday season. However, Q4's drop was greater than in
previous years, likely as a result of increased rate parity across
carriers in the market, which likely hampered consumers' ability to
find lower rates.
Key Observations
"In the first half of 2024, when
consumers shopped their policies, they were looking for
opportunities for discounts and were willing to switch. At that
time, insurers saw the growth of carrier switching outpacing the
growth in shopping because it was easier for shoppers to find more
favorable premiums," said Chris
Rice, vice president of strategic business intelligence,
insurance, LexisNexis Risk Solutions. "However, that trend reversed
in the latter half of 2024, with shopping growth outpacing new
business, as carriers in a number of states had implemented rate
increases, making it harder for consumers to find savings
attractive enough to follow through and switch."
New York and Hawaii as Outliers
Insurers saw
pre-hard market volumes in Q4 for shopping and new business in
every state except New York and
Hawaii. While overall, new policy
growth started to stabilize industry-wide in 2023, New York saw the opposite occur. It dipped
even further into negative territory as other states experienced
positive numbers. Despite having taken rate increases in line with
industry average, by the end of 2024, New
York was still below Q4 2020 levels for new policy growth
volumes, a likely result of many insurers still employing
underwriting restrictions and/or limiting marketing efforts in the
state.
Looking Ahead
If shopping for new policies (and
switching policies) loses steam in 2025, it may signal an
opportunity to create targeted marketing messaging for consumers
confronted with the limited availability of attractive deals.
Marketing efforts are becoming the main driver of shopping
activity, and carriers are taking note. As competition for
shoppers tightens, carriers may need to balance targeting the
consumers they are priced competitively to reach, while focusing on
retaining current customers to reach desired growth goals.
"Marketing and pricing strategies will be the key
differentiators as insurers work to attract new customers while
retaining existing policyholders," said Jeff Batiste, senior vice president and general
manager, U.S. auto and home insurance, LexisNexis Risk Solutions.
"The start of 2025 has been marked by devastating events, from the
wildfires that swept through Southern
California to winter storms extending into the South, which
compound the heavy losses from last year's natural disasters. While
auto insurance rates have largely stabilized for now, the
expectation is that insurers will continue to raise rates to
respond to these catastrophes. It will be crucial for insurers to
monitor how this trend affects home insurance shopping—and, in
turn, the behavior of auto shoppers who also own homes."
Download the latest U.S. Insurance Demand Meter.
LexisNexis U.S. Insurance Demand Meter
The LexisNexis®
U.S. 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 U.S. consumer shopping and switching behavior based
on its analysis of consumer shopping transactions since 2009,
representing nearly 90% of the universe of U.S. 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:
Annalysce Baker
LexisNexis Risk Solutions
Phone: +1 678.436.1579
annalysce.baker@lexisnexisrisk.com
Dean Carney
Brodeur Partners for LexisNexis Risk Solutions
Phone: +1 646.746.5607
dcarney@brodeur.com
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