Insights can help carriers benchmark their shopping and new policy volumes against the industry
LexisNexis Risk Solutions released the Q2 2020 Insurance Demand Meter, which highlights trends from Q1, and also reveals how the coronavirus pandemic is impacting U.S. consumer auto insurance shopping though April 2020. According to the Meter, shopping events have closely mirrored other national developments with the pandemic – from a marked decrease correlated to the stay-at-home orders to an increase that appears to coincide with the timing of the federal stimulus checks1. The report additionally highlights COVID-19’s impact by age group, geography and shopping channel.
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According to LexisNexis data, U.S. auto insurance shopping showed an average year to year growth rate of +7% from January through early March. This began to change on March 16, when it declined to -11% year-over-year growth, the lowest level seen since LexisNexis began tracking shopping patterns more than a decade ago. Activity rebounded a few weeks later, returning to an average growth rate of +8%. Similarly, new business volume growth has decreased at unprecedented rates, shrinking -10% in March and -14% in April. For Q1 2020, this represents a decline of 52% compared to Q1 2019 and tracks to a historical 5-year average decrease.
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“The year started with the highest shopping rate ever, with 41% of all policies having been shopped in the past year. But it became clear that COVID-19 started to affect auto insurance shopping activity in mid-March,” said Chris Rice, senior director of data science, insurance, LexisNexis Risk Solutions. “Not only did shopping volumes decrease, but new business volumes dropped even more as most carriers offered short term rebates to existing customers, making it difficult for consumers to find lower premiums with a new carrier. We will continue to evaluate the effect of COVID-19 in the next few months to see if the market balances itself, likely driven by changing unemployment rates and advertising.”
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