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Auto insurance shopping rate hit an all-time high in Q2
By Steve Hallo @ Property Casualty 360
This content is provided by Property Casualty 360 - ALM Media Properties, LLC. Full article listed here.
During the second quarter, personal auto insurance shopping hit a record high, according to LexisNexis Risk Solutions, which reported the shopping rate reached 41.5% and is expected to continue its upward trajectory in subsequent quarters. Overall shopping volume grew 1.1% year-on-year (YOY) and new policy growth increase 8% during the period.
Tax returns and another round of COVID-19 stimulus checks, both of which arrived in the March/April period, helped propel auto insurance shopping volume, according to LexisNexis. In April, there was a 32.3% boost in new businesses growth largely driven by uninsured shoppers buying policies.
“During the second half of 2020, strong shopping and new business volumes were buoyed by state and federal relief programs, so it will be interesting to see how the second half of 2021 performs,” Chris Rice, associate vice president of strategic business intelligence for LexisNexis Risk Solutions, said in a release. “The second quarter of 2021 represents the last time the industry’s YOY growth numbers will compare to the pandemic-related shutdowns from last year.”
The young & the risky
Millennials and Gen Z have become the most active demographics in terms of auto insurance shopping during the past quarter, according to TransUnion, while baby boomers and the Silent Generation have become less active.
Additionally, riskier drivers (those with TransUnion TrueRisk scores of 300-500) saw their three-week shopping rate average increase by 9.2% during the week of July 4, 2021. TransUnion reported similar, and at times even higher, rates occurred throughout the second half of Q2. This was a drastic shift from the first quarter, which saw three-week averages decline between 10-25%.
“Younger consumers who lost their jobs in 2020 may have subsequently left the auto insurance market altogether, but are now gradually returning as they take on new jobs and now have a need for coverage as their transportation requirements evolve,” Mark McElroy, executive vice president and head of TransUnion’s insurance business, said in a release. “Delayed tax refunds and stimulus, as well as the beginning of advanced payments on the new child tax credit, will give more people the opportunity to shop for new cars and new auto insurance. Overall, the seasonal ebb and flow of auto shopping that the industry has come to expect may not apply over the next few years.”
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In Michigan, auto insurance is a complex risk management tool. It can also be expensive if you do not do your homework when retrieving quotes and evaluating proper coverages. JLA Insurance Group has a wide range of solutions to assist with the best auto insurance solution.
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