CHICAGO, Aug. 25, 2022 (GLOBE NEWSWIRE) — Auto insurance purchases fell 3% overall in the second quarter of 2022 compared to the second quarter of 2021. This trend was driven primarily by a significant decline from higher-risk consumers. , where purchases decreased by 11%. Compared to second quarter 2021. TransUnion’s (NYSE: TRU ) new personal lines insurance trends and outlook report found that purchases of property and auto insurance in second quarter 2022 were generally subdued, with some exceptions in the segments certain.
When comparing consumers across all credit levels, there was a clear overall trend change in that consumers with high credit scores continued to increase their auto insurance purchases.
Auto insurance purchases by credit level (Q2 2022 vs Q2 2021)
| Low credit scores (300-500) | Average credit scores (501-700) | High credit scores (701+) | |||
| -11% | -3% | 4% |
“The lack of new vehicle purchases held back overall auto insurance purchases,” said Michelle Jackson, senior director of personal property and casualty insurance at TransUnion’s insurance business. “Even with the influx of consumers buying their own auto insurance as premiums rise from rate hikes across the industry, that can’t overcome the depressed purchase rates we’re seeing from consumers who aren’t buying new cars, creating a purchase event.”
Migration activity in southern states drives the purchase of homeowners insurance
Overall, homeowner insurance purchases saw a modest increase (4%) in the second quarter of 2022, compared to the same time last year. This trend was driven primarily by activity in the United States South, where purchases increased by 12%, compared to the second quarter of 2021.
“We’re still seeing interest in moving to sunnier environments, which has led to increased purchases of homeowners insurance in states like Florida and Texas, which ironically are states that are more prone to to extreme weather events and more expensive insurance,” Jackson said. . “However, consumers in the housing market are increasingly facing headwinds from rising mortgage interest rates and housing costs, which has dampened the rate of purchases and repurchases, and consequently, insurance purchases.”
It is possible for the market to make a comeback. According to a TransUnion Consumer Pulse survey conducted in the second quarter of this year, 32% of consumers reported that they will apply for a mortgage within the next year—a 4% increase from Q1 2022. Of those surveyed, Millennials led the all generations with 40%. This corresponds with our observations of homeowner purchases by generation, with Gen X and Millennials seeing the highest growth in purchases year-over-year (between 11%-14%).
The role of rent in securing property
Another factor in the slowdown in property insurance is that renters’ insurance purchases decreased significantly (10%) in the second quarter of 2022. While purchases were down across all generations, purchases among Baby Boomer and Silent Generation renters decreased by 16%, compared to Q2 2021.
“This is almost certainly a correction after an unusually large increase seen within the same group last year, when millions of older homeowners cashed in on their home equity and moved into the rental market. Given that they are typically more financially stable, they were more likely to purchase or maintain coverage for their new rental home,” Jackson added.
In addition, purchases in the second quarter of 2022 among Gen Z renters decreased by 12%, compared to the second quarter of 2021. This can be attributed to an overall increase in rents: According to a joint analysis by TransUnion and the National Association of Apartments of more than 300,000 rental units in the US. , the average monthly rental price increased 17% from $1,365 per month to $1,599, when comparing Q1 2021 to Q1 2022. Rising rents typically prompt renters to stay put instead of looking for a new apartment.
For additional insights into the personal lines insurance market, the full report can be accessed here.
About the TransUnion Insurance Trends and Outlook Report
Previously, Personal lines insurance shopping report, this quarterly publication examines trends in the personal lines insurance industry, including acquisitions, migration, breaches, stability of credit-based insurance and more. The Trends and Outlook Report research is based entirely on TransUnion’s extensive internal data and analysis. It includes information on insurance purchase transactions from January 2021 to July 2022. However, the report excludes data from insurance customers in California, Hawaii and Massachusetts, where credit-based insurance scoring information is not used for rating or underwriting of insurance.
About TransUnion (NYSE: TRU)
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