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Unpacking Auto Insurance Shopping Trends: An Overview

By May 26, 2023April 18th, 2024No Comments

In a recent article, LexisNexis provides an insightful glance into the current state of auto insurance shopping trends. U.S. auto insurance shopping volumes and the growth in new policies have seen a significant rise, which intensified in the first quarter of 2023, an unexpected trajectory in the face of the highest premium rate increases observed in years.

A Return to Pre-Pandemic Shopping Boost

Interestingly, the annual shopping boost related to the Earned Income Tax Credit, which was somewhat subdued for the past two years, has returned to pre-pandemic levels. This notable surge typically seen in the first quarter contributes significantly to the overall insurance shopping volumes.

A Soaring New Policy Growth Rate

As rate revisions take effect, new policy volumes have been maintaining their record streak since November 2022. Even though growth was marginally slower in March 2023 compared to the previous year, the growth rate in new policies continues to soar. Of note, there is considerable variation across states, with Texas leading the way and New York showing an unexpected negative growth.

The age demographic of 66 and above leads to the new policy growth, indicating an interesting shift in behavior. This age group, which traditionally didn’t shop or switch insurance providers frequently, is now doing so at an accelerated pace, suggesting opportunities for carriers that can effectively target these demographics.

Breaking Records in Shopping Activity

The first quarter of 2023 witnessed the highest-ever shopping volumes. With consistent growth observed across insured and uninsured as well as standard and non-standard market segments, shopping activity was on fire. Notably, there was a shift in growth from exclusive and independent agent (IA) distribution channels to direct channels by the end of the quarter.

The Impact of Vehicle Sales

Interestingly, vehicle sales, which are closely tied to shopping and switching events, have continued to play a vital role in new policy growth. However, a slight drop in overall vehicle sales in Q1 2023, primarily due to fewer used vehicle purchases, has resulted in a decline in shopping attributed to vehicle purchases.

Adam Pichon, Senior Vice President and General Manager of Auto Insurance and Claims at LexisNexis Risk Solutions, emphasized the importance of the observed trends: “Record-high rate increases are translating to record-high shopping volumes, with more of those shoppers purchasing so far in 2023. This trend seems likely to continue in the near term. Claim severity trends and the pace of state-level rate filings over the next quarter will be key factors as to how the rest of 2023 shapes up.”

Looking Ahead

As the total vehicle miles traveled have stabilized and claim frequencies remain flat, claim severities continue to rise, albeit at a slower pace. However, the changing economic conditions and their impact on vehicle sales and ultimately shopping volumes remain uncertain. Although the market anticipates a slowdown in growth rates in the second half of the year, it’s crucial to keep an eye on these evolving trends as we navigate through 2023.

Vantage Point Insurance: A Reliable Independent Agency in Oregon and Washington

Amid the shifting sands of auto insurance trends, independent insurance agencies like Vantage Point Insurance are emerging as essential players in providing customized solutions for clients. Situated in Oregon and Washington, Vantage Point Insurance is renowned for its agility and client-centered approach, making it an ideal choice for those navigating the dynamic auto insurance market.

Customized Solutions

Vantage Point Insurance is well-versed in analyzing current trends and understands the complex landscape of auto insurance shopping. The agency’s team of seasoned professionals leverages this knowledge to provide personalized advice and find the best insurance coverage to suit their client’s unique needs.

As a trusted independent agency, Vantage Point Insurance does not limit their offering to a single insurer’s plans. Instead, they curate a selection of policies from multiple insurers, ensuring their clients have a variety of choices tailored to their specific requirements and budgets. In light of the soaring new policy growth rate and shifting demographic trends, Vantage Point’s personalized approach offers a significant advantage.

Responsive Service and Unbiased Advice

The record-breaking shopping activity seen in Q1 2023 underscores the need for responsiveness and efficient service. Vantage Point Insurance stands out with its swift service, providing clients with timely policy quotes and handling claims with efficiency and professionalism.

Moreover, as an independent agency, Vantage Point offers unbiased advice. They are committed to guiding clients through the insurance shopping process, ensuring customers understand the nuances of their policy options. This transparency can be incredibly beneficial, particularly in the current market environment characterized by record-high rate increases.

Vehicle Sales and Auto Insurance

Given the continued importance of vehicle sales to new policy growth, Vantage Point’s expertise in this area is invaluable. Whether you’ve recently purchased a new vehicle or are contemplating a used one, their team can provide guidance on how these decisions might impact your auto insurance premiums. They can help you understand the implications of vehicle sales trends on your policy and provide tailored advice to mitigate any adverse effects.

Looking Ahead

As we progress through 2023, Vantage Point Insurance will continue to monitor evolving auto insurance trends and guide its clients accordingly. The agency’s emphasis on personalized service, responsiveness, and informed guidance make it a reliable partner for navigating the complexities of the auto insurance market. Whether you’re part of the age demographic that’s switching insurers at an unprecedented pace or you’re shopping for auto insurance for the first time, Vantage Point Insurance can provide the insight and support you need.

As the auto insurance landscape continues to shift and grow, having a reliable and knowledgeable partner like Vantage Point Insurance is invaluable. Their expertise and commitment to their client’s needs ensure you’ll receive not just a policy, but a comprehensive auto insurance solution that works for you.