LexisNexis insurance demand meter shows continued downward pressure on U.S. auto insurance buying habits

The latest edition of LexisNexis® Risk Solutions Insurance Demand Meter reported that the annual growth rate of U.S. auto insurance purchases, which includes purchases and new policies, fell for the fourth consecutive quarter for the first time since LexisNexis Risk Solutions began publish these quarterly measures.

Purchases were down 2.0% in Q2 2022 compared to Q2 2021 as the industry continues to face significant headwinds, including rising claims costs forcing insurers to continue to implement cost increases. tariffs in many US states. On the consumer side, inflationary pressures and vehicle shortages are leaving many potential buyers on the sidelines where they would have traditionally bought their policies.

New business growth was down 7.1% for the quarter from Q2 2021 as insurers continued to cut marketing spend, although this was an improvement from the 11% decline year-on-year observed in Q1 2022.

“This confluence of factors—carriers taking up fares due to profitability issues, slowing marketing spending, consumers struggling with inflation and less money to spend, vehicle shortages and rising car rates. interest — these are getting worse right now, leaving the insurance industry in a state of continuous flux,” said Adam Pichon, vice president and general manager, automobile insurance, LexisNexis Risk Solutions. “We’ve seen a lot of consumers exit the market due to affordability issues, which means many of these uninsured drivers will eventually re-enter the market. But the question is when.”

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For the first time since the start of the pandemic, middle-aged consumers (35-46) shopped at the highest rate of any age group, likely due to inflationary concerns and increases renewal prices. This follows several consecutive quarters of young buyers (16-35) leading thanks to federal stimulus checks and modified tax filing deadlines due to the pandemic.

“This middle-aged demographic has traditionally been a profitable segment for insurers,” Pichon said. “Even in these challenging times, carriers capable of…