Auto Insurance Shopping Rising Again as Rates Increase
As auto insurance rates increase, more consumers are shopping around for new policies. TransUnion’s latest Auto Insurance Shopping Index has observed five consecutive months of increases with 17.3% of the credit population now actively shopping for auto insurance as of Q1 2016. One year earlier in Q1 2015, 16.9% of the population shopped for auto insurance.
The increase in shopping has coincided with the rise in auto insurance rates. According to the Bureau of Labor Statistics’ Consumer Price Index, auto insurance costs rose 6% in April 2016. During the full year 2015, rates increased by 5.4%.
“More consumers are driving as the economy continues to perform well and gas prices remain low. With more drivers on the road, it is logical to see an increase in traffic accidents. As a result, we are seeing an increase in auto claims frequency and in response, some carriers are raising insurance rates. Consequently, we are seeing a rise in the number of consumers shopping for new or lower priced policies.”
Percent of Credit Population Shopping for Auto Insurance on a Yearly Basis
TransUnion data confirms that consumers shop for auto insurance around the time of a move. The prevalence of auto insurance shopping increases 200% the month prior to a move, 130% during the month a consumer moves and 60% one month after a move. “Consumers can check their credit score and should understand their credit history before they start shopping for auto insurance, since several aspects of a credit history could impact their premiums.”
“By all indications, we should see a continued strong appetite for auto insurance shopping in the near future,” said McElroy. “It’s important that carriers provide consumers with an easy shopping experience as well as providing quotes that are competitive to the consumer.”
TransUnion recently launched Quote Exchange, a dynamic insurance marketplace where carriers buy and sell real-time online quotes using enriched TransUnion data for precise segmentation and decisioning.
Quote Exchange is a marketplace for both carriers who are seeking new policyholders, and for those whom cannot provide competitive policies for consumers, but would like to provide them with other options. The Quote Exchange can help carriers build loyalty with consumers by offering insurance to shoppers who may not qualify for a policy with them.
“Quote Exchange is especially important now for carriers as they can build long-standing relationships with consumers while insurance shopping is rising,” added McElroy. “Eventually shopping may subside and the carriers taking advantage now will be in the best position to perform well in the future.”
For more information about the Insurance Shopping Index, please visit http://www.transunioninsights.com/studies/autoshopping/. More information about the Quote Exchange can be found at https://www.transunion.com/product/quoteexchange. For additional insight, see our recent blog posts: Three Lessons for Online Insurance Marketplaces and Attracting Online Auto Insurance Shoppers Requires Focus.
The TransUnion Auto Insurance Shopping Index is derived from TransUnion’s extensive database of credit data, which includes information on more than 450 million auto insurance shopping transactions from January 2009 to May 2016. The Index focuses on the credit population, highlighting TransUnion’s unique data. It also explores for a subset of the full data shopping rates for insurance policy holders. The Index excludes data from auto insurance customers in California and Massachusetts, where credit-based insurance scoring information is not used for auto insurance rating or underwriting.
The TransUnion Auto Insurance Shopping Index information is being used to support insurance carriers related to reporting, triggers, segmentation and lifetime value solutions. Please contact Stothard Deal (firstname.lastname@example.org) with questions about these services.
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