Property and auto insurance shopping in the second quarter of 2022 was generally subdued with variations in certain segments, according to the latest trends and outlook report from TransUnion, the global information and insights company.
The quarterly report found that homeowner insurance shopping was up only slightly (4%) compared to the same period last year, mainly due to activity in the Southern states, where shopping was up 12% compared to last year.
Auto insurance shopping was down 3% overall from a year ago, apparently the result of a big drop from higher-risk consumers, where shopping was down 22% compared to the second quarter of 2021.
“We were surprised by the shopping behavior around the auto space,” said Mark McElroy, executive vice president and head of TransUnion’s insurance business. “We can see the effects of supply chain disruptions and the lack of new vehicles.”
TransUnion regularly reviews insurance shopping trends and breaks down the data by geographic region, age and other factors. It uses customer engagement information from insurance companies and extrapolates across the industry. It complements the research with field surveys with consumers to assess current market and insurance trends.
A few other key findings:
• When comparing consumers at different credit levels, there is a clear departure from the general trend in that consumers with high credit scores continue to increase their auto insurance shopping.
• Renters insurance shopping declined significantly (10%) in Q2 2022. While shopping was down among all generations, shopping among Baby Boomer and Silent Generation renters was down 16%, compared to Q2 2021 Mr.
• Shopping in the second quarter of 2022 among Gen Z renters is down 12%, compared to the second quarter of 2021. This may be due to overall rents rising: according to a joint analysis by TransUnion and the National Apartment Association of more than 300,000 rental units in the U.S., the average monthly rent rose 17% from $1,365 per month to $1,599. Rising rents tend to cause renters to stay put instead of looking for new apartments, the report concluded.
“The lack of new vehicle purchases has depressed overall auto insurance shopping,” said Michelle Jackson, senior director of personal property and casualty insurance for TransUnion’s insurance business. “Even with the influx of consumers shopping around for their auto insurance as premiums are pushed up by price increases across the industry, it can’t overcome the depressed shopping rates we’re seeing from consumers who aren’t buying new cars, like this one way they create a shopping event.”
Migration impacts homeowners insurance
Migration activity to the southern states has caused homeowners to shop for insurance. Overall, homeowner insurance shopping saw a modest increase (4%) in the second quarter of 2022 compared to the same time last year. This trend was driven primarily by activity in the southern United States, where shopping was up 12% compared to Q2 2021.
“We’re still seeing interest in moving to sunnier environments, which has led to increased homeowner insurance shopping in states like Florida and Texas, which ironically are states that are more prone to extreme weather events and more -expensive insurance,” said Jackson. “However, housing consumers are increasingly facing headwinds from rising mortgage rates and housing costs, which has moderated the pace of purchases and repos, and therefore insurance shopping.”
There are signs that the market will recover, the report said. According to a Consumer Pulse survey conducted in the second quarter, 32% of consumers said they would apply for a mortgage in the next year, a 4% increase from the first quarter. Millennials – those between the ages of 25 and 40 – lead all generations with 40%. This is consistent with data showing that homeowners are shopping across generations, with Gen X and Millennials seeing the biggest growth in shopping over the year (between 11%-14%).
“Millennials, as a generation, are the leading drivers in many of the real estate transactions today,” McElroy said.
Looking ahead, McElroy said that as the level of loss costs for the insurance industry and supply chain disruptions ease, the market should start to boom.
Doug Bailey is a freelance journalist and writer who lives outside of Boston. He can be reached at [email protected].
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