U.S. shopping for personal lines insurance is showing signs of returning to pre-pandemic levels, according to a new TransUnion report. Auto insurance remains a big exception, however.

The consulting firm found in its Personal Lines Insurance Shopping Report that the three-week moving average for shopping in this sector rose 24.6 percent the week of March 28, 2021 compared to the previous year. Much of the increase stemmed from the fact that March 2020 marked the beginning of many state lockdowns, but there was at least one other large increase during the 2021 first quarter. Trans Union tracked a 26 percent year-over-year increase during the week of Jan. 3, 2021.

The personal lines insurance marketplace rebound was due to a number of factors, TransUnion said, including big growth in mortgage originations and consumers emerging from the pandemic with plenty of money to spend, and a resulting growing need to cover homes and valuable belongings.

“Low interest rates, a work from home posture, and a race for space fueled the hot housing market and the likely increase in property insurance shopping,” Mark McElroy, executive vice president and head of TransUnion’s insurance business, said in prepared remarks. “The housing market, though, also impacted other forms of insurance. In turn, it is now more important than ever to understand the full consumer credit picture as it has implications for varied insurance policies.”

Auto insurance, however, was a different story. While auto insurance shopping rose 14 percent during the week of March 28, 2021, auto insurance shopping rates have either declined or nudged just slightly higher for much of the 2021 first quarter, according to TransUnion.

“Based on our latest data, we expect that positive year-over-year trends will continue for personal lines insurance shopping as the economy continues to emerge from the pandemic,” McElroy said. “Price continues to be the main driver of auto insurance shoppers. For property insurance shoppers however, better coverage is the main driver, perhaps owing to the fact they are in a better financial position at this point in the recovery.”

TransUnion’s results are buttressed by a customer survey of 2,055 U.S. adults in March 2021. That survey results included:

  • 14 percent of respondents said they switched auto insurance providers since the beginning of the pandemic. Of that group, 42 percent said they changed because of a cheaper premium and 32 percent switched for better coverage.
  • About 11 percent of respondents said they switched property insurance providers since the beginning of the pandemic with 36 percent changing to secure better coverage and 35 percent doing so for a lower premium.
  • The percent of auto insurance inquiries with a mortgage trade opened within the preceding 90 days increased from 1.5 percent in 2019 to 2.1 percent in 2020.
  • The percent of property insurance inquiries with a mortgage trade opened within the preceding 90 days also increased to 2.4 percent in 2020 compared to 1.6 percent in 2019. While these percentage changes may seem low, the increase affected tens of thousands of insurance policies across the country, TransUnion said.

TransUnion said its Personal Lines Insurance Shopping Report is based on a larger report derived from TransUnion’s extensive database of credit data. It includes information on more than 500 million auto insurance shopping transactions from January 2016 to March 2021. The report excludes data from auto insurance customers in California, Hawaii and Massachusetts, where credit-based insurance scoring information is not used for auto insurance rating or underwriting.

Source: TransUnion