Inflation Drives 33% Surge in Auto Telematics Adoption in First Quarter of 2022
New TransUnion report finds consumers are seeking better value and service in addition to lower rates as they shop for insurance
With the costs of many goods and services rising dramatically in the last year, consumers are looking for more ways to lower expenses. TransUnion’s (NYSE: TRU) latest Personal Lines Insurance Shopping Report found the number of consumers who accepted a telematics offer from their auto insurance provider increased 33% since the end of 2021—a trend driven by consumers hoping to lower their premiums by demonstrating safe driving habits.
"In the insurance industry, more consumers are warming to the idea of using a telematics tool to enhance safe driving while also lowering costs. This evolving sentiment could carry over to similar offerings in the property space.”
Telematics programs use connected devices, mobile phones, or auto manufacturer car apps to monitor and report detailed driving behavior. Similarly, in homes, connected devices monitor for warning of fires, water leaks, and other hazard risks.
The new data comes from a TransUnion survey of 2,791 consumers conducted between February and March 2022. It found that, compared to the last survey in November 2021, the number of customers offered a telematics policy to monitor their driving and help determine their rates rose from 32% to 40%—and the number of those who opted in rose from 49% to 65%.
“It’s clear that high inflation levels are impacting consumer wallets, and many people are now considering new technologies that may help them save money. In the insurance industry, more consumers are warming to the idea of using a telematics tool to enhance safe driving while also lowering costs,” said Michelle Jackson, senior director of TransUnion’s personal property and casualty insurance business. “This evolving sentiment could carry over to similar offerings in the property space.”
Along with general inflation, cumulative auto insurance prices are up on average 4%, with some states trending at nearly 20% for some drivers, according to the report. In response, consumers are shopping for lower premiums, better coverage and better service from their insurer, a trend noted across auto, property and rental insurance.
Percentage of consumers shopping and switching insurance providers over the past six months
Switching (% of those shopping)
Auto and property insurance industries even out
Throughout 2021, year-over-year property insurance shopping rates remained extraordinarily high in response to a white-hot housing market. However, as the first quarter of 2022 unfolded, those rates trended negative on a YoY basis—the result of an increase in mortgage interest rates, combined with higher home prices and limited inventory.
By contrast, auto shopping rates were depressed throughout 2021 due to supply chain shortages. Initially, this market began 2022 below 2021 levels; however, by March, shopping was closer to even with the previous year. This bounce-back was driven by two factors: increased shopping in search of lower premiums and a boost of funds from tax returns that enabled more consumers to shop for automobiles.
“It appears that auto and property insurance industries found some equilibrium this quarter, after a tumultuous 2021,” said Jackson. “Inflation is projected to continue through 2022, which will likely have the dual effect of pricing out consumers from new homes and vehicles while motivating them to seek out more affordable coverage.”
For additional insights into the personal lines insurance marketplace, the full report can be accessed here.
About TransUnion’s Insurance Shopping Report
The quarterly Insurance Shopping Report is based entirely on TransUnion’s internal studies. The insurance shopping trends reported are based on TransUnion’s report which is derived from TransUnion’s extensive database of credit data. It includes information on insurance shopping transactions from September 2020 to March 2022. The report focuses on the credit population, highlighting TransUnion’s data. It also explores a subset of the total insurance shopping population. The report excludes data from insurance customers in California, Hawaii, and Massachusetts, where credit-based insurance scoring information is not used for insurance rating or underwriting.
About TransUnion (NYSE: TRU)
TransUnion is a global information and insights company that makes trust possible in the modern economy. We do this by providing an actionable picture of each person so they can be reliably represented in the marketplace. As a result, businesses and consumers can transact with confidence and achieve great things. We call this Information for Good®.
A leading presence in more than 30 countries across five continents, TransUnion provides solutions that help create economic opportunity, great experiences and personal empowerment for hundreds of millions of people.