Inflation continues to impact insurance shopping, TransUnion

TransUnion “Quarterly Report on Personal Line Insurance Trends and Outlook” shows that despite an initial increase in insurance company purchases at the start of the third quarter of 2022, the impact of inflation has reduced purchases for both auto and property insurance. The drop in rates in the final weeks of the third quarter is likely due to the aftermath of Hurricane Yang.

End-of-quarter auto insurance results were down 2% from the second quarter of 2022, according to the report. Rates for buying auto insurance did rise slightly until early October, when Hurricane Yang cut rates again. The report also notes that, according to JD Power and Associates, the increase in car sales in October last year may be the result of rising stocks of new cars. Compared to October 2021, auto insurance purchases were up nearly 11% in October last year, and the report added that “month-end retail units [are] It is expected to exceed one million for the first time since May 2021, according to JD Power and Associates.”

While consumers are increasing their car purchases in part due to the growing availability of vehicles, the TransUnion report also attributes the increase to higher premiums from insurers facing the effects of inflation, as well as the fact that more and more people are returning to work. , in person and spend more time behind the wheel than before. The report cited security firm Kastle Systems, which found that the number of workers returning to the office in September had reached the peak of the pandemic: “in the country’s 10 largest metropolitan areas, an average of 47.5% of workers commute to offices compared to the previous period.” -pandemic level.

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“The good news this quarter is that auto inventories have shown signs of easing to better meet pent-up consumer demand,” Michelle Jackson, senior director of personal property and casualty insurance at TransUnion’s insurance business, said in a press statement. “Moreover, demand itself is likely to increase as more employees commute to the office, all of which should have indirect implications for auto sales and insurance purchases.”

Similarly, in property insurance, there has been little fluctuation in buying trends, likely due to higher inflationary costs and consequent higher premiums. The continuing migration trend in the US has also had a strong impact on the market. Homeowners bore most of this change in the third quarter as tenants were “locked in” in place by rising rental prices; the report notes that renters tend to move more often than homeowners, but the homeowner migration rate increased 5% higher this quarter.

The report says that homeowners facing increases in their insurance premiums are likely to be looking to purchase a new insurance package: “JD Power found that nearly a third (31%) of insurers would ‘definitely’ change their home insurer if they changed their insurance “. auto insurer after the auto premium increase initiated by the insurer”. Homeowners who have changed packages are also likely to change their insurance companies.

The report includes market forecasts for 2023 and projections that inflation, recession fears and affordability concerns will continue to weigh on consumer spending.

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