LexisNexis Insurance Demand Meter Shows U.S. Auto Annual Shopping Rate Continued to Rise in Q2
Tuesday, August 31st, 2021
The latest edition of the LexisNexis® Risk SolutionsInsurance Demand Meter reports the overall annual U.S. auto insurance shopping rate rose to 41.6% in Q2 2021, as market conditions over the past year spurred traditionally stable segments to shop their insurance. While shopping grew 1.1% year-over-year (YOY) in Q2, new policy growth reached 8% despite volumes consistent with Q1 2021. The Meter shows a "Nuclear" reading as compared to Q2 2020's low volumes and market hurdles.
"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," said Chris Rice, associate vice president of strategic business intelligence for LexisNexis Risk Solutions. "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."
In 2021, the boost in uninsured shopper volumes related to tax returns, which typically occurs in late-February and early-March, was pushed to late-March and early-April due to IRS processing delays. The third round of COVID-related stimulus checks hit in early April as well, resulting in a second wave of uninsured shoppers. Because uninsured shoppers are more likely to purchase a new policy, there was also a notable impact on new business volumes, combined with record low volumes in April 2020, and results in a surge of 32.3% growth in April.
The Young are Becoming Restless Again
In 2020, the under 35 age groups saw the biggest impacts during and following the shutdowns while the 66+ age groups saw strong volumes. In 2021, the younger age demographics are returning to expected volumes resulting in strong YOY growth numbers while volumes for older demographics remain relatively flat.
"Despite new vehicle sales suppressed by microchip shortages, reduced rate activity by carriers, and labor shortages in nearly every service industry, shopping volumes have remained surprisingly strong," said Adam Pichon, vice president and general manager of auto Insurance at LexisNexis Risk Solutions. "While driving behaviors trended back towards 2019 patterns over the first half of 2021, which could lead to carriers evaluating rate levels over the second half, the full impact of the COVID delta variant is the big unknown as we look to the future."
To download the latest Insurance Demand Meter, click here.