Policyholders Seeking Lower Costs Help Push Auto and Property Insurance Shopping Rates Higher at the End of 2022
New TransUnion report finds rising premiums the likely driver of shopping as consumers seek lower rates
In Q4 2022 auto and property insurance shopping rates rose 7% and 5%, respectively, compared to the same time the year prior. However, the increases represent more of a recovery than a true surge, as insurance shopping was down significantly in Q4 2021 and generally suppressed throughout 2022.
“Our report found greater shopping activity among certain geographic and demographic segments. For example, the Western U.S. saw the highest shopping for auto and renters insurance. Insurers who can incorporate these insights into their marketing strategy can augment their objectives to better identify and target the right consumers.”
The findings are part of TransUnion’s (NYSE: TRU) latest quarterly Insurance Personal Lines Trends and Perspectives Report, which includes trends in the auto and property insurance industries, as well as insights on cyber trends and consumers’ financial stability, behaviors and attitudes. The report found that the primary driver of increased insurance shopping this past quarter was the search for lower rates by consumers.
“Our report found greater shopping activity among certain geographic and demographic segments. For example, the Western U.S. saw the highest shopping for auto and renters insurance,” said Michelle Jackson, senior director of personal property and casualty insurance in TransUnion’s insurance business. “Insurers who can incorporate these insights into their marketing strategy can augment their objectives to better identify and target the right consumers.”
Improving value for consumers
While insurance carriers that hone their marketing efforts can improve acquisition, retention of customers will depend on carriers demonstrating higher value for policyholders. The report highlights the addition of cyber incident response services as part of existing homeowner insurance policies as an example of how insurers can improve value without significantly increasing costs.
These services provide expert assistance to consumers who have been victimized by cybercrime, helping them recover personal data and protect their privacy. According to CyberScout, a TransUnion brand, its cyber incident response teams are able to resolve approximately 95% of incidents without resulting in a cyber claim or claims payment.
In addition, a recent TransUnion survey found 85% of consumers prefer shopping for home and auto insurance through websites and apps. However, when it comes to managing existing policies or claims, the top channel for communication is via phone calls. Enabling solutions that provide branded calling and enhance right-party contacts can improve overall claims experiences, leading to greater customer satisfaction.
Looking ahead in 2023
The report also flags greater risk exposure for the personal lines industry based on emerging trends. Citing a recent analysis of employment trends, the report found more employees will likely be required to return to the office this year. The increased commuting will likely translate to a rise in auto claims.
Property insurance carriers may also have increased exposures. TransUnion’s TransUnion 2023 Consumer Credit Forecast predicted a 24% increase in home equity originations, which means homeowners priced out of buying new homes, may likely be planning home renovation projects.
“The biggest risk in home improvements is when consumers don’t report those changes to their insurers, leaving a gap in coverage,” said Jackson. “Given the anticipated rise in home equity originations, carriers should be proactive about checking in with consumers to ensure they’re adequately covered for any improvements and additions they may have in their homes.”
For additional insights into the personal lines insurance marketplace, the full report can be accessed here.
About TransUnion’s Insurance Personal Lines Trends and Perspectives Report
This quarterly publication examines trends in the personal lines insurance industry, including shopping, migration, violation, credit-based insurance stability and more. The Trends and Perspectives Report research is based entirely on TransUnion’s extensive internal data and analyses. It includes information on insurance shopping transactions from July 2021 to January 2023. However, 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 with over 12,000 associates operating in more than 30 countries. We make trust possible by ensuring each person is reliably represented in the marketplace. We do this with a Tru™ picture of each person: an actionable view of consumers, stewarded with care. Through our acquisitions and technology investments we have developed innovative solutions that extend beyond our strong foundation in core credit into areas such as marketing, fraud, risk and advanced analytics. As a result, consumers and businesses can transact with confidence and achieve great things. We call this Information for Good® — and it leads to economic opportunity, great experiences and personal empowerment for millions of people around the world. http://www.transunion.com/business