Revealed – what’s happening with US auto insurance
“March marks the one-year anniversary of the beginning of pandemic-related shutdowns, which brought much of our lives – including auto insurance shopping and switching – to a screeching halt,” said LexisNexis Risk Solutions associate vice president of auto insurance Tanner Sheehan. “A year later, we are starting to hurdle that very deep trough from the first quarter of 2020, and this is reflected in this quarter’s Demand Meter.”
Shopping patterns typically increase during the first quarter of the year, LexisNexis noted, mostly thanks to income tax credits and returns. However, new business growth rates in February took a hit due to several factors, namely: delays in income tax processing, winter storm Uri causing power outages and damaged infrastructure, and insurance companies that were severely impacted by Uri.
The month of March fortunately faired much better, LexisNexis found. It noted that income tax processing delays led to new policyholders shopping in March than in February. The resurging economy and the easing of lockdown restrictions also led to new volume growth of 27.8% for the month, the firm reported, and the quarter finished with new policy growth of 7.7%.
“As people return to a normal way of living, we expect the industry and shopping activity to bounce back,” commented Sheehan. “Carriers will need to be prepared with their new business and renewal programs to take advantage of shopping growth and build on their brand promises.”
Earlier this month, LexisNexis published a report which looked at the auto insurance market’s performance for the entire year of 2020. The firm called 2020 a “rollercoaster year,” due to contrasting trends such as overall shopping volumes increasing despite the pandemic disrupting business, and a noticeable increase in dangerous driving behavior in spite of travel restrictions.