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Property Insurance Shopping Drops into Negative Figures for First Time in 18 Months

Property and Auto Insurance Shopping Slows at End of 2021

Despite optimism at the outset of the quarter, property and auto insurance shopping trended below 2020 levels at the end of 2021. TransUnion’s (NYSE: TRU) latest Personal Lines Insurance Shopping Report found auto insurance shopping was down an average of 12.5%, while property insurance shopping dropped an average of 3.4%, compared to the same time period in 2020.

Record-breaking prices for both new and used vehicles deterred many consumers from auto shopping, and in turn, reduced insurance shopping by as much as 16.4%, compared to Q4 2020. However, insurance premiums have continued to rise in response to rising severity trends, which is prompting more consumers to switch carriers, according to a recent report by J.D. Power.

While the auto insurance market remained suppressed throughout 2021, the housing market had been red-hot until year’s end, dropping into negative territory for the first time in more than 18 months. However, this change may have been more of a correction, following a very strong year.

“There were several factors that cooled off the property market, including the resurgence of COVID-19, as well as rising interest rates and rent prices,” said Mark McElroy, executive vice president and head of TransUnion’s insurance business. “It is still important to keep perspective and understand that shopping rates had been elevated well above normal levels throughout the year.”

What Does this Mean for 2022?

COVID-19’s omicron variant served as a harsh reminder that even near-term events are difficult to forecast. Another factor is the increase of severe weather events across the country in December. The report also notes that damages inflicted by tornados pushed the U.S. past its predicted $105 billion in weather-related losses. The fallout is likely to include generally higher premiums but also lower marketing budgets, which will reduce consumer engagement—a critical element of sales.

Despite this volatility, some projections can be offered. For example auto lending to non-prime customers is likely to show growth in 2022, but vehicle inventory may impact overall originations.

Also, while the housing market cooled, homeowners are still likely to take advantage of their equity gains by selling and downsizing or renting. Millennials will continue to be the most active in migration and home purchases. The report notes that within this group, there are more Black and Hispanic households than in older generations, and homeownership among younger Hispanic people is growing especially fast.  

"As Millennials mature and have increased earning power, they are facing unprecedented and unpredictable financial, environmental and social changes,” said McElroy. “Insurers should take a partnering approach by meeting people where they are in their current financial pictures and by offering flexible solutions.”

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 July 2020 to January 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.