With a Few Exceptions, Personal Insurance Shopping Subdued in Q2 2022
New TransUnion report identifies evolving trends in homeowners, renters and auto insurance markets
Auto insurance shopping was down 3% overall in Q2 2022 compared to Q2 2021. That trend was primarily driven by a significant decrease by higher-risk consumers, where shopping decreased 11%, compared to Q2 2021.TransUnion’s (NYSE: TRU) new Personal Lines Insurance Trends and Perspectives Report found property and auto insurance shopping in Q2 2022 was generally subdued, with a few exceptions in certain segments.
We’re still seeing interest in relocating to sunnier environments, which has led to increased homeowners’ insurance shopping in states such as Florida and Texas, which ironically are states that are more prone to extreme weather events and more expensive insurance.
When comparing consumers across credit tiers, there was a clear outlier to the overall trend in that consumers with high credit scores continued to increase their auto insurance shopping.
Auto Insurance Shopping by Credit Tier (Q2 2022 vs Q2 2021)
Low Credit Scores (300-500)
Medium Credit Scores (501-700)
High Credit Scores (701+)
“The lack of new vehicle purchases suppressed overall auto insurance shopping,” said Michelle Jackson, senior director of personal property and casualty insurance, in TransUnion’s insurance business. “Even with the influx of consumers shopping their auto insurance as premiums increase from industry-wide rate increases, this cannot overcome the suppressed shopping rates we are seeing from consumers not purchasing new cars, thus creating a shopping event.”
Migration activity to southern states driving homeowners insurance shopping
Overall homeowners’ insurance shopping saw a modest increase (4%) in Q2 2022, compared to the same time last year. That trend was primarily driven by activity in the Southern United States, where shopping was up 12%, compared to Q2 2021.
“We’re still seeing interest in relocating to sunnier environments, which has led to increased homeowners’ insurance shopping in states such as Florida and Texas, which ironically are states that are more prone to extreme weather events and more expensive insurance,” said Jackson. “However, consumers in the housing market are increasingly facing headwinds from rising mortgage interest rates and housing costs, which has tempered the rate of purchases and refis, and consequently, insurance shopping.”
It is possible the market will see a rebound. According to a TransUnion Consumer Pulse survey conducted in Q2 this year, 32% of consumers reported they will apply for a mortgage within the next year—a 4% increase from Q1 2022. Of the respondents, Millennials led all generations at 40%. This corresponds to our observations in homeowners shopping by generation, with Gen X and Millennials seeing the highest uptick in year-over-year shopping (between 11%–14%).
The role of rent in property insurance
Another factor in the property insurance slowdown is that renters’ insurance shopping decreased significantly (10%) in Q2 2022. While shopping was down across all generations, shopping among Baby Boomer and Silent Generation renters decreased 16%, compared to Q2 2021.
“This is almost certainly a correction after an unusually large rise seen within in this same cohort last year, when millions of older homeowners cashed in on their home equity and moved into the rental market. Given they are typically more financially stable, they were more likely to buy or maintain coverage for their new rental home,” added Jackson.
In addition, shopping in Q2 2022 among Gen Z renters decreased 12%, compared to Q2 2021. This may be attributable to an overall rise in rents: According to a joint TransUnion and National Apartment Association analysis of more than 300,000 rental units in the U.S., the median monthly rent price rose 17% from $1,365 a month to $1,599, when comparing Q1 2021 to Q1 2022. Rising rents typically drive tenants to stay in place rather than look for a new apartment.
For additional insights into the personal lines insurance marketplace, the full report can be accessed here.
About TransUnion’s Insurance Trends and Perspectives Report
Formerly, the Personal Lines Insurance Shopping 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 January 2021 to July 2022. 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)
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