LexisNexis Insurance Demand Meter Registers as "Nuclear" for New Policy Growth and "Hot" for Shopping in Q4 2022
Rhea-AI Summary
The LexisNexis Risk Solutions Insurance Demand Meter reported a 2.8% year-over-year growth in U.S. auto insurance shopping for Q4 2022, an increase from 1.2% in Q3. New policy growth surged by 10.2% compared to Q4 2021. This rise follows an average premium hike of over 9% in 2022, prompting increased shopping activity as consumers faced significant rate revisions since August 2022. Notably, the 55+ age group showed the highest increase in purchase rates. Forecasts suggest continued volatility in shopping rates for 2023 due to ongoing insurer rate revisions and tax-related impacts.
Positive
- 2.8% growth in auto insurance shopping year-over-year for Q4 2022.
- 10.2% increase in new policy purchases compared to Q4 2021.
- Increased shopping activity driven by significant rate hikes in the market.
Negative
- Average auto insurance premiums rose over 9%, increasing affordability concerns for consumers.
- Market volatility expected in 2023 may affect consistent purchasing behavior.
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Auto insurance shopping and policy switching spiked in response to rate increases from
"The shopping activity we're seeing in the market continues to be extremely volatile as insurers take rate to combat profitability concerns due to rising inflation, loss costs and interest rates," said
Late Year 2022 Auto Insurance Rate Increases Inspire More Q4 Shoppers to Purchase New Policies
Some of the largest rate revisions from
"We attribute significant November and December jumps in new policy purchases, and consumers switching carriers to two primary factors," said
The rate at which shoppers switched or purchased coverage was up across all demographics. In particular, the 55+ age demographic saw the largest increase in purchase rates, along with consumers that carry high bodily injury limits and those who have long tenure with their previous carriers. Despite inflation and auto premiums rising, consumers are maintaining their current coverage levels when they switch carriers. In fact, consumers with bodily injury limits in the
"One very notable trend we saw in 2022 was the fact that some lower-risk, experienced drivers who traditionally don't shop that often are now shopping more and are more likely to switch when they do shop," said Pichon.
A Look Ahead
2023 could likely be headed for another year of vehicle and insurance shopping volatility in year-over-year growth rates. The first half of the year could be very interesting as tax-related payouts from 2022, which would typically help drive increased shopping during the first quarter, are expected by
Conversely, insurer rate revisions are expected to last well into 2023, so that could continue to help drive higher shopping than we might otherwise see outside of tax season-driven shopping.
"We do expect to see a continuation of higher consumer purchase rates in the coming months," said Pichon. "With millions of consumers still slated to see upcoming rate increases when they receive their renewal notices, combined with insurers still looking to return to profitability, there's a strong likelihood that the Insurance Demand Meter's reported shopping and purchasing levels should remain high."
Download the latest Insurance Demand Meter.
About the LexisNexis Insurance Demand Meter
The LexisNexis Insurance Demand Meter is a quarterly analysis of shopping volume and frequency, new business volume and related data points. LexisNexis Risk Solutions offers this unique market-wide perspective of consumer shopping and switching behavior based on its analysis of billions of consumer shopping transactions since 2009, representing nearly
About
LexisNexis® Risk Solutions harnesses the power of data and advanced analytics to provide insights that help businesses and governmental entities reduce risk and improve decisions to benefit people around the globe. We provide data and technology solutions for a wide range of industries including insurance, financial services, healthcare and government. Headquartered in metro Atlanta,
Media Contacts:
Chas Strong
LexisNexis Risk Solutions
Phone: +1.706.714.7083
Charles.Strong@lexisnexisrisk.com
Brodeur Partners for LexisNexis Risk Solutions
Phone: +1.646.746.5611
darmstrong@brodeur.com
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