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LexisNexis Insurance Demand Meter Reports Growth in U.S. Auto Insurance Q4 Shopping Activity

Trends suggest a return to normal shopping patterns heading into 2021

02/23/2021

ATLANTA — To help carriers understand the ever-changing market and offer benchmark insights, LexisNexis® Risk Solutions released its latest Insurance Demand Meter, reporting on Q4 U.S. auto insurance shopping activity, as well as 2020 year-end trends. The Meter shows that both shopping and new business policy volumes increased overall in the fourth quarter, and that despite the ups and downs throughout the year, 2020 ended relatively strong. The year concluded with an annual shop rate of 41%, which, while consistent with each quarter in 2020, is the highest since we began collecting the data.

Shopping Rate Over Time

Shopping activity is hot, but conversion appears tricky
The auto insurance shopping quarterly growth rate averaged 4.7% in Q4, ending the year relatively high at 10.9%. New business growth also increased from the end of the previous quarter to 3.9%, yet the year-over-year growth rate for the quarter was 0.6%, lagging behind shopping activity. 

“Considering all the events that shaped 2020, the fact that the market had some growth is a great benchmark for 2021,” said Tanner Sheehan, associate vice president of auto insurance at LexisNexis Risk Solutions. “We’re already starting to see patterns emerge when it comes to stimulus check distributions, and we look forward to seeing how correlations like that continue to play out in the year ahead.”

Gap remains between insured and uninsured shopping
Although both the insured and uninsured segments experienced an uptick in December, shoppers with existing insurance grew 15.1% while those who were uninsured declined -7.6%. With COVID-19 stimulus packages distributed, 2020 concluding rates indicate early signs of an uptick in the uninsured shopper segment heading into 2021, which aligns with the trends we saw earlier in the year with the Q2 stimulus payouts.

Additional key insights from Q4 include:
  • Shopping patterns by age normalized: While Q3 growth rates for all age groups stabilized within a few percentage points of each other for the first time, in November growth rates by age group began to shift back toward historical patterns. Q4 ended with those ages 66+ re-emerging as the most active shoppers.
  • Shopping with Exclusive Agents: Growth in the exclusive agent channel began to emerge with the initial COVID-19 shutdowns in March, and it continued to strengthen and outperform other distribution models throughout 2020, ultimately ending the year with +16% growth.

“It’s promising for the industry to see that the latest round of stimulus checks are enabling Americans to get back on the road and we’re cautiously optimistic that as the COVID-19 vaccines are more broadly administered a return to normalcy may be possible. With early discussion of additional stimuli, we look forward to continuing to examine the trends and identifying new opportunities of U.S. auto insurers in the year ahead,” Sheehan said. 

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 90% of the universe of shopping activity.

To download the latest Insurance Demand Meter, click here.

About LexisNexis Risk Solutions
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, Georgia, we have offices throughout the world and are part of RELX (LSE: REL/NYSE: RELX), a global provider of information and analytics for professional and business customers. For more information, please visit www.risk.lexisnexis.com and www.relx.com.

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