If you follow the insurance industry at all, you've no doubtread stories about the disruption of the traditional personal autoinsurance market by InsurTech start-ups like Lemonade orMetromile.You've probably also seen many ads touting the ease with whichconsumers can buy personal auto insurance online with just a fewclicks.

Based on the stories and ads, it would be reasonable to assumethat an increasing number of consumers are shopping around,comparing rates and coverage. But that's not the case, according toa new report by TransUnion. Instead, the percentage of consumersshopping for personal auto insurance declined to its lowest levelin four years.

The TransUnion Auto Insurance Shopping Index foundthat the percentage of consumers shopping for personal autoinsurance declined in each of the past two years to 20.0% at theend of 2017, the lowest level since2013's 20.4%, as shown in the chart at right. The findings werereleased May 16 during the 2018 TransUnionInsurance Summit, attended by more than 150 insuranceexecutives.

“The auto insurance marketplace is highly competitive, and this is likelyconcerning to carriers that fewer consumers are shopping for suchpolicies,” said Mark McElroy, executive vice president ofTransUnion's insurance business unit in a statement. “With fewerconsumers shopping for auto insurance, carriers must be equipped toprovide them with the right offer at the right time, one thatprovides benefits to the policyholder without adding too much riskto the insurer.”

Fewer ads, fewer shoppers?

TransUnion suggests that the drop in auto insurance shopping maybe due to reduced advertising spending by insurance carriers,citing a 2017 report by SNL Financial which found that insurersreduced their advertising spend by 1.6% the year prior. “We believethat rising accident frequency in recent years, due in part todistracted driving, has led carriers to reducetheir advertising spend as they adjust rates to account for theirincreases in loss,” David Drotos, vice president of insurancesolutions at TransUnion, said in a statement.

An alternative explanation not addressed by the index is whetherconsumers buying or leasing new or used cars may be satisfied withthe insurance coverage they already have and they may not beinterested in changing carriers.

The report notes the resulting decline in insurance shopping wasobserved throughout 2017. Compared to the same month in both 2016and 2015, the percentage of consumers shopping for personal autoinsurance in 2017 was below those percentages.

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Who's shopping?

The TransUnion report also looked at the demographic of theconsumers shopping for personal auto insurance in 2017:

• 15% Male
• 38% Subprime (Insurance score lower than 600)
• 68% Have an auto loan
• 22% Have a mortgage
• 20% Millennials and Gen Z

For more information about the TransUnion Auto InsuranceShopping Index, visit the TransUnion website.

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About the Shopping Index

According to TransUnion, this study is based entirely onTransUnion data assets. The auto insurance shopping trends reportedare based on TransUnion's internal Auto Insurance Shopping Index,which is derived from TransUnion's extensive database of creditdata. It includes information on more than 500 million autoinsurance shopping transactions from January 2012 to March2018.

The Index focuses on the credit population, highlightingTransUnion's data. It also explores a subset of the total insuranceshopping population. The Index excludes data from auto insurancecustomers in California and Massachusetts, where credit-basedinsurance scoring information is not used for auto insurance ratingor underwriting.

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