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Weakness in Auto Insurance Offset by Continued Positive Property Insurance Trends

New TransUnion report reveals the personal lines insurance marketplace shows signs of returning to pre-pandemic levels

As the U.S. economy begins to recover from the pandemic that has gripped the world for the past year, new data from TransUnion’s (NYSE: TRU) Personal Lines Insurance Shopping Report shows that property insurance shopping is growing at a robust rate. Conversely, auto insurance has lagged behind 2020 levels during much of the first quarter of 2021.

Property insurance shopping has risen markedly in the last year. The three-week moving average of such shopping rose 24.6% the week of March 28, 2021 compared to the previous year. While the increase was influenced by the fact that March 2020 marked the beginning of many state lockdowns, interestingly, this marked only the second largest such increase in Q1 2021. A 26.0% year-over-year increase occurred during the week of January 3, 2021.

In comparison, auto insurance shopping rose 14.0% the week of March 28, 2021, but that increase was an outlier compared to the rest of the quarter. Auto insurance shopping rates have mostly declined or risen only slightly for much of Q1 2021 compared to the previous year.

Driving the personal lines insurance marketplace are a combination of factors, including robust growth in mortgage originations and flush consumer wallets emerging from the pandemic with expanding needs to cover homes and valuable belongings.

“Based on our latest data, we expect that positive year-over-year trends will continue for personal lines insurance shopping as the economy continues to emerge from the pandemic,” said Mark McElroy, executive vice president and head of TransUnion’s insurance business. “Price continues to be the main driver of auto insurance shoppers. For property insurance shoppers however, better coverage is the main driver, perhaps owing to the fact they are in a better financial position at this point in the recovery.”

What’s driving shopping behaviors?

In addition to the customary market analysis found in the quarterly report, TransUnion collected a data snapshot via a high-level consumer survey in March 2021. These survey results allowed TransUnion to better understand the different motivations of auto and property insurance shoppers over the course of the pandemic.

The survey of 2,055 U.S. adults found that approximately 14% of respondents said they switched auto insurance providers since the beginning of the pandemic. Of that group, 42% said they changed because of a cheaper premium and 32% switched for better coverage. About 11% of respondents said they switched property insurance providers since the beginning of the pandemic with 36% changing to secure better coverage and 35% doing so for a lower premium.

An interesting nuance occurred during the pandemic, though, where the dynamics between personal lines insurance shopping and new loans shifted. TransUnion research found that the percent of auto insurance inquiries with a mortgage trade opened within the preceding 90 days increased from 1.5% in 2019 to 2.1% in 2020. The percent of property insurance inquiries with a mortgage trade opened within the preceding 90 days also increased to 2.4% in 2020 compared to 1.6% in 2019. While these percentage changes may seem low, the increase affected tens of thousands of insurance policies across the country.

“Low interest rates, a work from home posture, and a race for space fueled the hot housing market and the likely increase in property insurance shopping,” said McElroy. “The housing market, though, also impacted other forms of insurance. In turn, it is now more important than ever to understand the full consumer credit picture as it has implications for varied insurance policies.”

For additional insights into personal lines insurance marketplace, the full report can be accessed here.

About TransUnion’s Insurance Shopping Snapshot Report

The quarterly Insurance Shopping Snapshot Report is based entirely on TransUnion’s internal studies. The auto 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 more than 500 million auto insurance shopping transactions from January 2016 to March 2021. 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 auto insurance customers in California, Hawaii and Massachusetts, where credit-based insurance scoring information is not used for auto 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 a comprehensive picture of each person so they can be reliably and safely 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.