Auto insurance shopping rates were up 12% in Q2 2023, compared to the same time in 2022. While vehicle sales played a role in this increase, the search for lower insurance premiums was the primary driver, as the Consumer Price Index for motor vehicle insurance rose 17% in June 2023 compared to June 2022.
The findings are part of TransUnion’s latest quarterly Insurance Personal Lines Trends and Perspectives Report, which includes trends in the auto and property insurance industries, as well as survey data about consumers’ behaviors and attitudes.
Despite historically high vehicle pricing and increased auto insurance premiums, J.D. Power's U.S. automotive forecast for June 2023 estimated a 23% boost in new vehicle sales year-over-year. Meanwhile used car sales dipped slightly as a result of improved new vehicle inventory.
“There was a drop in shopping activity among riskier consumers in Q2 2022, partly due to insurer’s reduced marketing spend; however, we saw a rebound in activity from that segment in Q2 2023,” said Stothard Deal, vice president of strategic planning for TransUnion’s insurance business. “Lower risk consumers have been consistently shopping at higher rates for the past 12 months.”
Property Insurance Shopping Slows but Remains Elevated
The report found homeowners are also shopping for lower rates, with property insurance shopping among that group rising 13% in Q2 2023 compared to the same time last year. However, the shopping rate was down 7%, compared to Q1 2023, most likely due to increasing interest rates and stubbornly high home prices.
This situation presents potential challenges and opportunities for insurers with younger Gen Z and Millennial customers. As these groups are kept priced out of homeownership, some may opt to live in regions more prone to natural disasters, which has significant implications for insurance losses.
Others may simply choose to continue renting, which opens an opportunity for insurers to modernize their renter’s insurance offerings. In addition, this group will likely need a different approach for marketing efforts.
“It’s time for insurers to start thinking about how to most effectively engage with their upcoming Gen Z customers,” said Deal. “We know they are more likely to learn about new products and services from social media and appreciate receiving personalized offers.”
Source: TransUnion
Abby Andrews