View this article online: https://www.claimsjournal.com/news/national/2024/03/12/322310.htm

Report: U.S. Consumers Continue to Shop and Switch Auto Insurance at Higher Rates, Dragging on Retention Rates

Continued rate increases, along with improved combined ratios, and now opens a window for insurers to capitalize on continued shopping as they seek a return to profitability in 2024.

That’s according to the LexisNexis Insurance Demand Meter, a “Hot” Q4 2023.

Other findings in the report include:

• U.S. auto insurance shopping and new policies posted positive year-over-year growth and record volumes for the final quarter of the year, both registering as ‘Hot’ on the Insurance Demand Meter.
• Year-over-year shopper growth showed the strongest Q4 growth since 2020.
• Quarterly year-over-year growth for new policies outpaced shopper growth for the sixth consecutive quarter, meaning consumers continue to switch carriers at an increasing rate when they shop.
• 41% of insured households shopped their auto insurance at least once in 2023.
• Retention levels have dropped a three percentage points since Q1 2022 as consumers hit the market

With 2024 already underway, insurers have an opportunity to seize market share, particularly evident in the direct channel where factors like marketing expenditure and rate adjustments are prompting increased shopping behavior.

Texas, one of the first states to increase rates and experience positive growth, saw negative shopping numbers in the final quarter of 2023, according to the report.