Though shopping volume has increased in early 2023, the report predicts the possibility of a slowdown in the second half of the year, depending on economic conditions and their impact on vehicle sales. (Credit: Dragonstock/Adobe Stock)
Increases in auto insurance policy rates are inspiring customers to shop around for more affordable options, and the Q1 2023 LexisNexis Insurance Demand Meter recorded the highest level of policy shopping volume since the Demand Meter began in the first quarter of 2020.
New policy growth was particularly strong in to start 2023 at 17%; up from the 10.2% growth recorded in Q4 2022. According to the report, new policy growth occurred across all age demographics, but surprisingly those in the 66+ age group led all others with 27% growth. This, combined with the findings of their Q4 2022 report, shows older drivers – who have traditionally not done much policy shopping, and were unlikely to switch when they did shop – are shopping and switching at an accelerated pace, which make them an important demographic for carriers to consider when creating marketing campaigns.
"Vehicle sales, especially drops in purchases of used vehicles, are still playing a key role in the dramatic increases in shopping as vehicle purchases are closely aligned to shopping and switching events," Chris Rice, associate vice president of strategic business intelligence at LexisNexis Risk Solutions said in a release. "Shopping that pertains to a vehicle sale held steady at around 27% for new vehicles and 36% for used, but the downtick in vehicle sales overall caused a drop in all shopping attributed to vehicle purchases, which can naturally lead to premium increases and more shopping and purchasing in each of the aforementioned age demographics."
Though shopping volume has increased in early 2023, the report predicts the possibility of a slowdown in the second half of the year, depending on economic conditions and their impact on vehicle sales.
"We're still seeing record-high shopping activity and new policy purchasing as auto insurance rates continue to soar," Adam Pichon, senior vice president of Auto Insurance and Claims at LexisNexis Risk Solutions said in a release. "We are starting to see some stabilization in the market, however, with claim frequencies flattening out the last few quarters and severities rising at a slower clip. But until claims severity levels off and vehicle sales begin to rise again nationwide, it is likely insurers are going to continue to take rate, so we do expect to see shopping activity remain volatile at least into the next quarter as insurers grapple with macroeconomic conditions."
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.