Auto insurance shopping volume set a new record for the second consecutive quarter of 2024.
The number of U.S. consumers shopping for auto insurance was up 7%, compared to Q2 2023, according to TransUnion’s latest quarterly Insurance Personal Lines Trends and Perspectives Report.
This trend has been driven in recent years by rising insurance premiums that motivated consumers to shop for lower rates.
For auto insurance, price remains an important driver when looking at the buying behavior of consumers. According to May 2024 data from the U.S. Bureau of Labor Statistics, the Consumer Price Index for Motor Vehicle Insurance was 20% higher than in May 2023. However, a slight month-to-month decline (-0.2) from April 2024 to May 2024 — the first such decrease since December 2021 — suggests the auto insurance market may be approaching rate adequacy.
“It is very encouraging to see indicators that carriers are returning to rate adequacy, and ultimately profitability,” said Stothard Deal, vice president of strategic planning for TransUnion’s insurance business.
TransUnion reported that while auto insurance shopping continued to increase, switching behavior remained relatively flat with just 40% of those who shopped for auto insurance switching providers. This means 60% of shoppers did not end up switching, according to TransUnions’ researcher.
The Q2 2024 TransUnion consumer survey also showed that some 28% of auto insurance shoppers were presented with a telematics-based policy option as an effort to save on insurance costs. Of those offered telematics, some 61% accepted the option.
Overall, the private passenger auto insurance market is set to make a return to profitability. According to S&P Global Market Intelligence, private passenger auto insurance is expected “to make a dramatic return to underwriting profitability,” with S&P GMI projecting a personal auto 2024 combined ratio of 98.4, down from 104.9 in 2023 and 112.2 in 2022.
With personal auto representing almost 35% of overall P/C insurance industry premiums written, that turnaround is what will drive the overall underwriting profit for the industry, according to S&P GMI projections presented in the “S&P Global Market Intelligence 2024 U.S. P&C Insurance Market Report.”
Some good news for the inudstry: S&P Global Market Intelligence is forecasting a combined ratio of 99.2 for the total U.S. P/C insurance industry overall in 2024, signifying a return to underwriting profitability for the first time since 2021.
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