Auto insurance coverage buying fee drops in Q3 – LexisNexis

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“Insurance purchasing returned to levels compared to 2019 and previous years in the third quarter, rather than following the usual 2020 trends,” said Adam Pichon, vice president, personal insurance, LexisNexis Risk Solutions. “The previous quarters this year have been driven by the return of consumers to normal, but that pattern has been mitigated by macroeconomic and carrier-driven factors that impacted the market in the second quarter and continued into the third.”

In the third quarter, more consumers stayed with their current insurance carrier than in previous quarters, compared to the same time last year, the report said. Several macro and microeconomic trends have driven change, including:

  • The global scarcity of microchips has resulted in a shortage of new car inventories, and rising used car costs have resulted in fewer overall car purchases, which typically account for one in three auto insurance purchase events.
  • As drivers get back on the road, claims frequency increases, which can lead insurers to request rate increases and cut marketing spend to prop up profitability. In some states where regulators didn’t approve increases, operators’ marketing spend had decreased significantly.
  • Government-enacted moratoriums on policy cancellation have been lifted, potentially leading more consumers to keep their current policies.

Consumers also left the auto insurance market in higher volumes in the third quarter than in the previous four years, according to the report. This trend could have been influenced by the tariff increases and the shortage of cars, as policyholders could not replace their vehicles without collision protection.

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“We’ve been leveraging over 10 years of trends and seeing the cyclical nature of insurance buying trends,” said Chris Rice, vice president, strategic business intelligence, insurance, LexisNexis Risk Solutions. “Consumers shop when their premiums rise, which is often due to a consumer experiencing a life event such as buying a new home or vehicle, adding a new licensed driver or paying a higher bill when their policy is renewed as a result of an insurance contract will claim a traffic violation or the increase in their airline’s tariffs. “