How often do auto insurance consumers desire to shop for a new policy? This is one of many questions TransUnion seeks to answer with its Auto Insurance Shopping Index.

Focused on the general credit population, the index draws upon information from the agency’s extensive  database. TransUnion’s database contains information concerning more than 430 million auto insurance shopping transactions dating from 2009 to 2013, providing a rich, unique data set. It also explores for a subset of the full data shopping rates for insurance policyholders.

After analyzing this data, TransUnion has concluded that consumers who shop for insurance and receive a quote are 350 percent more likely to shop again in the next year compared to policyholders who did not receive a quote. The report authors also found that more than half—55 percent—of policyholders who do shop receive two or more quotes within an annual period.

So what is motivating consumers to switch insurers, or at least look for greener pastures? Barring unsatisfactory claims experiences, some experts theorize that avid comparison shopping may be the result of robust marketing programs.

“More than a billion dollars are spent each year on auto insurance advertising, most of which urges consumers to switch their policies to another carrier,” says Mark McElroy, executive vice president of TransUnion’s insurance business unit. “Our proprietary data is able to track actual trends in new business auto insurance since 2009, improving the industry’s access to strategic information on auto insurance shopping.”

TransUnion notes that overall shopping rates for auto insurance are down about 4 percent in the 12 months ending June 2013 relative to the full year of 2012. Moreover, rates decreased about 7 percent relative to a year earlier. While 15.1 percent of the credit-active population shopped for new auto insurance policies in the 12 months ending June 2013, this represented a decline from 15.7 percent for the full 2012 year, and 16.2 percent for the 12 months ending June 2012.

The data also provides insight into the characteristics of auto insurance shoppers, as well as potential group-specific motivating factors. Among other characteristics, the information shows that younger drivers tend to shop for auto insurance more frequently, and auto insurance shopping peaks at age 25 for both men and women. 

The credit reporting agency also finds that younger women—those between 25 and 40 years old—are more active auto insurance shoppers than their male counterparts. However, that trend reverses at mid-life. After age 40, the percentage of women who shop for new policies wanes, while the shopping rate among men remains relatively stable.

Movers and Shakers

While auto insurance shoppers tend to be younger, those who are in the process of, or have recently changed their place of residence also tend to be heavy shoppers. Compared to non-movers, consumers who move residences are 200-percent more likely to shop for auto insurance before their move; 130-percent more likely during the month of their move; and 60 percent more likely one month after the move.

“In the competitive auto insurance market, data and analytics can mean the difference between winning and losing, as a result of low retention and adverse selection,” McElroy reports. “Auto insurance shopping data help insurers understand how their company is faring among insurance shoppers.” “Among other things, our data can tell insurance companies if their customers are shopping more than the general market, which customers are quoting most often and when they are likely to shop,” McElroy adds.

Other findings of TransUnion’s Auto Insurance Shopping Index include:

  • Shoppers in previous years are much more likely to shop in the current period (350- and 300-percent higher shopping rates one and two years after their original shopping year, respectively). 
  • Higher risk auto insurance customers—those with lower credit-based insurance scores—shop most frequently. Consumers with the highest insurance scores are less likely than the general population      to shop for new auto insurance.  
  • On average, auto insurance shoppers solicit two quotes (2.04); nearly half (45 percent) of auto insurance shoppers solicit only one quote. 
  • Spring months are the most active for auto insurance shopping, while December is the least active month. 

The index excludes data from auto insurance customers in California and Massachusetts, where credit-based insurance scoring information is not used for auto insurance rating or underwriting.