LexisNexis insurance demand meter shows continued downward pressure on U.S. auto insurance buying habits

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New business growth was down 7.1% for the quarter from Q2 2021 as insurers continued to cut marketing spend, although this was an improvement from the 11% decline year-on-year observed in Q1 2022.

“This confluence of factors – carriers taking up fares due to profitability concerns; slowing marketing spending; consumers struggling with inflation and less money to spend; vehicle shortages and rising interest rates – these are getting worse at the moment, leaving the insurance industry in a state of continuous flux,” said Adam Pichon, vice president and general manager, automobile insurance, LexisNexis Risk Solutions. “We’ve seen a lot of consumers exit the market due to affordability issues, which means many of these uninsured drivers will eventually re-enter the market. But the question is when.”

Identifying the right critical growth targets for insurers

For the first time since the start of the pandemic, middle-aged consumers (35-46) shopped at the highest rate of any age group, likely due to inflationary concerns and increases renewal prices. This follows several consecutive quarters of young buyers (16-35) leading the way thanks to federal stimulus checks and modified tax filing deadlines due to the pandemic.

“This middle-aged demographic has traditionally been a profitable segment for insurers,” Pichon said. “Even in these difficult times, carriers that are able to best target this age group are able to gain market share.”

When will the uninsured return to the market?

As carriers began demanding payments in the second half of 2021 after voluntary and state-issued COVID-related moratoriums began to decline, consumer volumes exited the market, meaning they had dropped their policies between the first of a month and the next. . Our data shows that this metric has actually returned to the levels we have seen in previous years.

According to LexisNexis Risk Solutions purchasing trend data for the past 13 years, most of these consumers are expected to re-enter the market eventually.

“The schedule could very well extend into 2023, which carriers will need to consider as they look to the second half of 2022,” said Chris RiceAssociate Vice President of Strategic Business Intelligence, Insurance, at LexisNexis Risk Solutions.

Purchase expectations

In addition to issues surrounding the reintegration of uninsured drivers into the market, other factors to watch for the next two quarters will be the effect of continued rate increases and an expected increase in car sales compared to recent quarters.

“Recently, buying activity has started to pick up slightly after a slow start to the year and a very poor second half of 2021,” Pichon said. “The first half of 2021 saw extremely high new car sales, which slowed significantly in the second half, so we are now starting to increase slightly as we break through this low point. We expect continued marginal improvement over the second half of the year, but sustained growth is more likely to occur later as more buyers re-enter the market.”

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About the LexisNexis Insurance Claim Counter
The LexisNexis Insurance Demand Meter is a quarterly analysis of purchase volume and frequency, new business volume, and related data points. LexisNexis Risk Solutions offers this unique, market-wide perspective of consumer purchasing behavior and change based on its analysis of billions of consumer purchase transactions since 2009, representing nearly 90% of the universe of insurance buying activity.

About LexisNexis Risk Solutions
LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to deliver insights that help businesses and government entities reduce risk and improve decisions for the benefit of people everywhere. We provide data and technology solutions for a wide range of industries, including insurance, financial services, healthcare and government. Based in the Atlanta metro area, Georgia, we have offices around the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information and analysis for professionals and businesses. For more information, please visit www.risk.lexisnexis.comand www.relx.com.

Media contacts:
Chas Strong
LexisNexis Risk solutions
Phone: +1.706.714.7083
[email protected]

Donna Armstrong
embroiderer Partners for LexisNexis Risk solutions
Phone: +1.646.746.5611
[email protected]

SOURCE LexisNexis Risk Solutions

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