Strategic Marketing Fuels Surge in Auto Insurance Shopping and New Policy Growth
LexisNexis® U.S. Insurance Demand Meter Reaches “Nuclear”
Auto insurance shopping and new policy volumes have surged to record levels, according to the latest U.S. Insurance Demand Meter by LexisNexis® Risk Solutions. The unprecedented growth, attributed in great part to insurer-led marketing initiatives aimed at price-sensitive consumers, marks the second consecutive quarter of heightened activity.
Jeff Batiste, senior vice president and general manager, U.S. auto insurance at LexisNexis Risk Solutions, noted that the momentum in policy shopping and new policy volumes reached levels not seen before as insurers successfully balanced profitability with market demands. This reactivation of marketing strategies has played a crucial role in attracting consumers facing rising auto and home policy costs.
“Throughout Q3, the momentum in policy shopping and new policy volumes reached unprecedented levels as U.S. insurers worked to balance profitability with market demands,” noted Mr. Batiste. “With strategic reactivation of marketing programs, U.S. insurers enticed motivated consumers, eager to offset the market’s rising auto and home policy costs. Resulting record activity levels, coupled with the effects of increased rates, may see the industry officially turning the page on its less profitable chapter and opening its doors for growth.”
Auto Insurance Shopping Surge & New Policy Growth Among Main Drivers
The report highlights a 31.2% year-over-year increase in auto insurance shopping during the third quarter of 2024, a significant jump from the 16.1% growth observed in the second quarter. Additionally, new auto policy volumes grew by 25.9% compared to the previous year, outpacing the 19.5% increase reported in Q2.
Preferred Segments are More Active
A notable shift in consumer behavior was observed among older demographics and traditionally less active customer segments, spurred by rate increases. Direct-to-consumer channels saw a 67% increase in shopping rates and a 54% growth in new policies, significantly outperforming independent agent carriers.
August Peak Month for Activity
State-specific data revealed that Florida, Texas, and Michigan experienced substantial increases in both shopping and new policy activations in August. Conversely, the impact of Hurricane Helene, towards the end of Q3-2024, temporarily disrupted this trend, particularly in Florida and Georgia, although these states recovered more rapidly than the Carolinas.
Forward-looking thoughts
Looking forward, Chris Rice, vice president of strategic business intelligence at LexisNexis Risk Solutions, emphasized the need for insurers to keep a close watch on industry trends. These include stabilizing claim severities, the increased frequency of weather-related events, and rate adjustments, particularly as the market dynamics may prompt long-tenured customers to consider future shopping events.
“Looking at trends, typically, soft markets spur aggressive marketing and targeted U.S. rate adjustments to enhance segmentation,” surmised Mr. Rice. “Following an especially challenging four years, U.S. insurers must closely monitor industry trends, including stabilizing claim severities, increased frequency of weather-related events, rate adjustments and whether the recent shopping by long-tenured customers has motivated these consumers to entertain future shopping events.”
How to access the full report
Individuals interested in obtaining an official copy of the quarterly LexisNexis® Insurance Demand Meter report, can download it via this link to the company website.
