Auto insurance shopping ended 2020 on an upswing - PropertyCasualty360

“While insurance shopping remained below 2019 levels throughout much of the second half of 2020, rates began to rise once again YoY in the last few weeks of the year — a promising trend heading into 2021,” Mark McElroy, executive vice president and head of TransUnion’s insurance business, said. (Credit: Rawpixel.com/Shutterstock.com)

While shopping for personal auto insurance saw large fluctuations throughout the year, the rate of shopping grew 6.2% year-on-year (YoY) during December, according to TransUnion.

The credit reporting agency noted the growth likely reflected strong stock market performance, rising consumer confidence, promising developments on the vaccine front and an increase in new car sales.

“While insurance shopping remained below 2019 levels throughout much of the second half of 2020, rates began to rise once again YoY in the last few weeks of the year — a promising trend heading into 2021,” Mark McElroy, executive vice president and head of TransUnion’s insurance business, said in a release. “Various factors such as the next round of economic stimulus payments, vaccine distribution and leading financial indicators will be important considerations as we continue to watch insurance shopping in the months ahead.”

TransUnion’s review found shopping levels spiked at the beginning of July, but quickly tapered off at the end of the month and August. Another spike was seen in early September 2020, but rates again fell off as October closed and contracted further in November.

“We’ll likely see the economic challenges of 2020 continue to impact drivers well into 2021, especially among the higher-risk groups that also have a higher concentration of younger drivers,” David Drotos, vice president of insurance solutions at TransUnion, explained in a release. “As a result of the exacerbated financial impact of the pandemic, the industry will likely observe higher amounts of customers electing to go without insurance altogether or shopping for lower-cost insurance.”

Higher-risk consumers slowed shopping

Throughout the first half of 2020, shopping rates for higher-risk drivers significantly trailed behind 2019 levels, according to TransUnion, which explained COVID-driven financial hardships were likely the reason why. From July to December 2020, shopping rates for this group did not improve, further highlighting that economic recovery continues to be a challenge for these shoppers.

A TransUnion survey conducted in December found 44% of consumers were primarily concerned with the ability to pay their auto insurance bill in the coming three months.

“COVID-19′s headwinds remain very real for American businesses and consumers, and we will continue tracking insurance shopping trends throughout 2021 in an effort to equip the industry with insights that can help enable trust with customers,” Drotos said.

Additionally, research indicates many U.S. consumers reduced or eliminated auto, homeowners and life insurance because of COVID-related financial hardships, TransUnion reported, noting 29% of survey respondents said they simply couldn’t afford to pay their premiums. Overall, nearly 40% of Americans either reduced or eliminated some form of insurance.

“As we commented in our June Insurance Shopping Snapshot Report, one of the biggest challenges for nonstandard insurers has been customers electing to go without insurance altogether, whereas consumers of more standard and preferred insurers will shop for lower-cost insurance as opposed to letting their coverage lapse,” Drotos said. “The economic challenges of 2020 have likely increased some drivers’ choice to go without coverage, especially among the higher-risk groups that also have a higher concentration of younger drivers.”

Related:

Let's block ads! (Why?)